eric r. claeys, george mason university school of law · 2017-01-18 · introduction: natural-right...

TAKINGS, REGULATIONS, AND NATURAL PROPERTY RIGHTS

Eric R. Claeys, George Mason University School of Law

Cornell Law Review, Vol. 88, No. 6, September 2003,

pp. 1549-1671

George Mason University Law and Economics Research Paper Series

08-60

This paper can be downloaded without charge from the Social Science Research Network at http://ssrn.com/abstract_id=373661

http://ssrn.com/abstract_id=0000000

TAKINGS, REGULATIONS, ANDNATURAL PROPERTY RIGHTS

Eric R. Claeyst

This Article reexamines federal regulatory-takings law in light of a lineof eminent-domain cases decided in American state courts during the nine-teenth century. These decisions drew on Founding Era principles of naturallaw to generate a body of what modern lawyers would call "regulatory tak-ings" law. These principles entitled property owners to the free use of theirproperty. They conceived of a property "regulation" as a positive law order-ing an owner's free use of property to accord with the natural rights of herneighbors. If a positive law restrained the free use of property for some otherpurpose, it constituted an "invasion" of use rights and therefore "took" con-stitutionally-protected "private property."

The Article offers three main lessons. First, the Article explains whymodern federal and state regulatory-takings law suffers from serious doctri-nal problems. The nineteenth-century cases fashioned workable doctrinalstandards because they consistently followed the principle that the free use ofproperty deserved protection; Penn Central v. City of New York and otherleading modern cases respect property's social value inconsistently, if at all.Second, the nineteenth-century cases provide a different way to conceive ofproperty rights. Most modern property theory is strongly utilitarian; the nine-teenth-century cases justified the free use of property as an extension of themoral freedom inherent in being human. Finally, the distinction these casesdrew between "regulations" and "invasions of right" provide important in-sights into the original meaning of the Takings Clause in the Fifth Amend-ment to the U.S. Constitution.

INTRODUCTION: NATURAL-RIGHT THEORY IN NINETEENTH-

CENTURY STATE EMINENT-DOMAIN LAW .................. 1552A. Regulations and Takings Now ...................... 1552

B. "Regulations" and "Takings" During the NineteenthC entury ............................................ 1553

C . Im plications ........................................ 1555

t Assistant Professor of Law, St. Louis University. I am especially grateful to RichardEpstein for encouraging me to explore nineteenth-century state regulatory takings caselaw. I thank Philip Hamburger, Dennis Hutchinson, Daniel Hulsebosch, ChristopherBracey, Nicole Garnett, Scott Kieff, Adam Mossoff, John Nagle, Troy Paredes, and PeteSalsich for useful criticisms or suggestions. I am grateful to the University of Chicago LegalScholarship workshop, the University of San Diego School of Law, the Kansas UniversitySchool of Law, and the St. Louis University School of Law for letting me present draftversions of this Article. Thanks to Richard Brumbaugh for his research assistance, and tothe St. Louis University School of Law for a research grant and other support.

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1. A New and Old Approach to Federal RegulatoryTakings Law (or, Clearing the Penn CentralM uddle) ......................................... 1555

2. A New and Old Approach to State RegulatoryTakings Law .................................... 1558

3. Introducing Equality and Freedom as Standards inTakings Law .................................... 1559

4. Nineteenth-Century Regulatory Takings Principles andthe Original Intent Behind the Takings Clause ...... 1561

D. The Argum ent ...................................... 1565I. REGULATIONS AND TAKINGS IN NATURAL-RIGHT

THEORY ................................................... 1566A. The Social Compact ................................ 1566B. Property Rights ..................................... 1568C . T akings ............................................. 1569D. Regulations, Invasions of Right, and Regulatory

T akings ............................................. 1570II. REGULATORY TAKINGS DOCTRINE IN THE NINETEENTH

CENTURY .................................................. 1574A . O verview ........................................... 1574B. Public Health and Safety ........................... 1577C. The Public Morals and Order ...................... 1581D. The Regulation of Private Property: The Equal

Rights of All, or Securing an Average Reciprocity ofA dvantage .......................................... 15851. Abating Private Nuisances ........................ 15852. Securing a Common Benefit to All Affected Owners... 15873. Cases of Private Necessity, or Regulating When There

Is No Natural Property Right ...................... 15894. Invasions of Right ................................ 1591

E. The Protection of Public Property Interests: PublicProperty and Private Property Affected with a PublicIn terest ............................................. 15931. Public and Private Ownership ..................... 15942. "Regulation" of Public Nuisances .................. 15973. Equal-Advantage Principles in Public-Nuisance

Regulation ....................................... 1599III. THE PROGRESSIVE ERA: THE TURN TO UTILITARIAN

PROPERTY THEORY ........................................ 1604A. The Demise of the Nineteenth-Century Approach .. 1604B. Hadacheck v. Sebastian: Regulating Pollution over

T im e ............................................... 160 71. The Natural-Right Approach ....................... 16072. The "Coming to the Nuisance" Problem ............. 1608

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3. The Centrality of "Freedom of Action" to PropertyRegulation ....................................... 1609

4. Freedom of Action When a Homeowner Comes to aN uisance ........................................ 1612

C. The Billboard Cases: Eyesores and the Free andEqual Use of Property .............................. 1615

D. Pennsylvania Coal Co. v. Mahon, or Natural-RightPrinciples' Half-Hearted Entrance into FederalTakings Law ........................................ 16181. Natural-Right Takings Doctrine .................... 16192. Utilitarian Takings Theory ........................ 16213. Justice Holmes's Utilitarian Dilemma, and Mahon's

Ambivalent Legacy ................................ 1625E. Euclid: Deference in Regulatory Takings Law ....... 1627

1. Euclid's Zoning Scheme ........................... 16272. The District Court Opinion: The Distinction Between

Police Power and Eminent-Domain Power ........... 16283. Pollution Control ................................. 16294. Aesthetic Control ................................. 16305. Zoning and the Locality Rule ...................... 16316. Undeveloped Property ............................. 16327. The Supreme Court's Opinion and Its Legacy ........ 1633

F. Miller v. Schoene, Public Necessity, and the Embraceof Utilitarian Property Theory ...................... 16351. Cedar Rust Fungus and Other Weed- and Pest-

Control Laws .................................... 16362. Changing Circumstances in Natural-Right

Constitutional Interpretation ....................... 16373. Regulating Cedar Rust Consistent with Natural-Right

Principles ........................................ 16384. The Supreme Court's Embrace of Utilitarianism and

Legal Realism .................................... 16415. Miller v. Schoene and the Redundancy of

Regulatory Takings with Legislation ................ 1643IV. Penn Central, Ad Hoc Interest Balancing, and the

Takings M uddle ........................................ 1644A. Penn Central: Completing the Utilitarian Turn ...... 1645B. Loretto: Regulatory Touchings ....................... 1648C. Lucas: Total Use Restrictions and the

"Denominator" Problem ............................ 1652D. Palazzolo: Complications with Expectations .......... 1657E. Tahoe-Sierra, or Conceptual Severance Run Amok ... 1660

1. A Total Restriction for a Temporary Period .......... 16602. Land-Use Moratoria Under the Natural-Right

Approach ........................................ 1661

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3. Faux Formalism .................................. 1664

4. All-or-Nothing Doctrinal Pressures .................. 1665

CONCI.USION ................................................... 1669

INTRODUCTION: NATURAL-RIGHT THEORY IN NINETEENTH-CENTURY

STATE EMINENT-DOMAIN LAW

A. Regulations and Takings Now

Regulatory takings law combines the worst of two worlds-consti-tutional law's arid generalities and property law's substantive difficul-ties. To hear the Supreme Court tell it, this confusion is the best wecan expect. In Penn Central Transportation Co. v. New York City, the lead-ing regulatory takings case of our time, the Supreme Court com-plained that regulatory takings law "has proved to be a problem ofconsiderable difficulty."' "[Qjuite simply," the Court confessed, it"has been unable to develop any 'set formula' for determining" regu-latory takings cases.2

There are many reasons for this problem, but we make it worse byassuming that regulatory takings law is a relatively recent invention.Most lawyers and scholars assume that "regulatory takings" did noteven exist as a conceptual category until the U.S. Supreme Court in-vented it in 1922, -" and that there is no earlier tradition of Americantakings cases to teach us how to apply the Takings Clause 4 to regula-tions. In his 2002 opinion in Tahoe-Sierra Preservation Council v. TahoeRegional Planning Agency, Justice Stevens read the Court's regulatorytakings precedents narrowly in large part because he thought thosecases were of "recent vintage." 5 Even Justice Scalia, the mostrespected originalist on the federal bench, conceded a decade ago inLucas v. South Carolina Coastal Council that the regulatory takings prin-ciples he was developing for the Court were "not supported by earlyAmerican experience." 6

1 438 U.S. 104, 123 (1978).2 Id. at 124.

3 See, e.g., Robert Brauneis, "The Foundation of Our 'Regulatoy Takings'Jurisprdence"The Myth and Meaning of Justice Holmes's Opinion in Pennsylvania Coal Co. v. Mahon, 106

YALE L.J. 613, 615 (1996) (dubbing Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922),the "Adam" of regulatory takings jurisprudence).

4 U.S. CONST. amend. V ("[N]or shall private property be taken for public use, with-out just compensation.").

5 122 S. Ct. 1465, 1478 (2002).6 505 U.S. 1003, 1028 n.15 (1992) (stating that although "largely true," the historical

account is irrelevant because state practices prior to incorporation of the Takings Clause"were out of accord with any plausible interpretation of [the Clause]").

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B. "Regulations" and "Takings" During the Nineteenth Century

Were early Americans as oblivious about "regulatory takings" asJustices Stevens and Scalia assume they were? One need not look veryfar to find examples of Founding Era treatises or cases saying thatproperty rights should be "sacredly protected." 7 The doubts becomeeven stronger if one looks to nineteenth-century state eminent-do-main cases. In Tahoe-Sierra last Term, the plaintiffs did not win anycompensation, even though a bi-state planning agency had strippedthem of all development rights in their land for more than two and ahalf years.8 In one 1841 case, by contrast, an owner won compensa-tion because a state aqueduct project had deprived him of water rightsfor just two and a half months.9 If the Founders and nineteenth-cen-tury state judges were this solicitous of property rights, can it really betrue that they refused to apply their principles about property rightsand takings to property regulations?

This Article argues that modern takings law and scholarship pro-foundly misunderstand nineteenth-century state regulatory takingslaw. "' Early state eminent-domain opinions did not organize takingscases under the same categories that we apply now, but it is still possi-ble to identify a series of decisions that closely resemble modern regu-latory takings cases. These decisions drew on social-compact andnatural-right political theory to develop broad legal distinctions be-tween property regulations and regulatory takings. If property regula-tions did not live up to the standards for "regulations" prescribed bynatural-right theory, state courts held that the restrictions were "viola-tions" or "invasions" of property rights, which we would now call "reg-ulatory takings."

This conclusion is especially striking because many of the founda-tional state regulatory takings opinions are well known and misreadanyway. The confusion arises because modern lawyers and judgesread these decisions anachronistically. Quite often, early state courtjudges did say that "regulations" were not "takings." Modern readersthen quickly jump to the conclusion that a state could never triggertakings problems so as long as it exercised its regulatory powers with-out touching, trespassing, or confiscating property.

For nineteenth-century judges, the concept of "regulation" meantsomething substantively quite different from what we assume it meansnow. After several generations of New Deal regulation, we associate

7 2 JAMES KENT, COMMENTARIES ON AMERICAN LAW 319 (2d ed., Halsted 1832); seeVanhorne's Lessee v. Dorrance, 2 U.S. (2 Dall.) 304, 314 (C.C.D. Pa. 1795) (noting that "amore sacred regard should have been paid to property").

8 See Tahoe-Sierra, 122 S. Ct. at 1470, 1478.9 See Comm'rs v. Kempshall, 26 Wend. 404, 404, 413 (N.Y. 1841).1o See discussion infra Part 1I.

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"regulation" with "any government rule restraining the use of prop-erty, for any purpose of the public's choosing." This understandingmakes it difficult, if not impossible, to articulate a principled distinc-tion between regulations and takings. By contrast, when nineteenth-century lawyers used the term "regulation," they invoked moral andpolitical principles that limited the scope of "regulation" as surely asthey justified it. To borrow Randy Barnett's definition, property "regu-lations" were expected to "make" property rights "regular."' I Regula-tions were expected to order and encourage the free and equal use ofproperty. In one 1799 case, a lawyer argued that "bye-laws may regu-late but not restrain trade."'12 Even as late as 1915, roughly when theearly conception of regulation confronted the conception thatprevails today, a then-U.S. Senator and future Supreme Court Justicedefined "regulation" to mean "adjusting conditions so as tofacilitate." 1

Understood in the earlier, narrower sense, the concept of "regu-lation" quietly informed and complemented what it meant for govern-ment to "take" private property. The law of nature entitled everyperson to a certain set of rights to control, to exchange, and especiallyto use her own property. 14 "Regulations" aimed to secure in practicethe equal share of control, disposition, and use rights to which ownerswere entitled in principle. 15 The main line of "regulations" definedand protected property rights or other personal rights. They preventedone owner from overstepping his own fair and equal share of userights and grabbing some of his neighbors' in the process. 16 Oncethese laws had equalized neighbors' use rights, a smaller class of "reg-ulations" restrained and ordered the exercise of rights to enlarge everyaffected owner's practical freedom over her property. 17 Roughlyspeaking, the former prevented nuisances, while the latter forcibly re-arranged owners' uses of property to benefit all of them as a partner-ship benefits all of its partners.

If, however, a law deprived a person of more rights in practicethan necessary to satisfy either of these standards in principle, itstripped owners of "property" in their use rights. In the words of atwentieth-century Supreme Court case, such a law forced "some peo-

H See Randy E. Barnett, The Original Meaning of the Commerce Clause, 68 U. CFIi. L. REv.

101, 139 (2001) (using this definition of "regulation" to explain the meaning of "regulate"as applied to the Commerce Clause).

12 Respublica v. Duquet, 2 Yeates 493, 494 (Pa. 1799).13 The Hon. George Sutherland, The Constitutional Aspect of Government Owner-

ship, Address at the Missouri Bar Association Meeting 8 (Sept. 29, 1915) (transcript availa-ble from the Library of Congress, Justice Sutherland collection).

14 See discussion infra Part I.A.15 See discussion infra Part I.D.I! See discussion infra Parts IIB, I.D.I, II.E.2.17 See discussion infra Parts ll.D.2, II.E.3.

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ple alone to bear public burdens which, in all fairness and justice,should be borne by the public as a whole.""' Because such a lawstripped owners of use rights they did not need to relinquish for good"regulation," it "invaded," "violated," or "took" private property.

C. Implications

1. A New and Old Approach to Federal Regulatory Takings Law (or,Clearing the Penn Central Muddle)

These early state-court decisions teach a simple but powerful les-son about modern federal regulatory takings doctrine: if we reallywanted to enforce a coherent doctrine, we could. The state decisionsread state takings clauses and other constitutional guarantees to estab-lish sweeping moral distinctions between the proper "regulation" ofindividual property rights and the "invasion" or "taking" of suchrights. These guarantees drew lines much like those that run throughother broad guarantees in the Bill of Rights. In constitutional lawnow, we are perfectly comfortable with the idea that the Free SpeechClause 19 covers not only obvious censorship but also regulations thatincidentally restrain speech. We do not hesitate to distinguish amongregulations that prevent abuses of speech rights (like obscenity and libellaws), regulations that order the exercise of speech rights (like time,place, and manner restrictions), and regulations that have no connec-tion to either of these justifications. Our background ideas about ob-scenity, libel, and time-place-and-manner restrictions inform andcomplement what comes to mind when we speak of a law that"abridges" free speech. Our predecessors were just as comfortablemarking off principled distinctions among nuisance-control regula-tions, common-benefit regulations, and regulations that "invaded"-and thus "took"-some of an owner's fair and equal share of userights in her property.

These standards are sorely needed because, to borrow CarolRose's famous phrase, modern regulatory takings law is widely recog-nized to be a "muddle."20 This muddle has become especially severein recent years. Cases like Lucas, Tahoe-Sierra, and Palazzolo v. RhodeIsland21 have exposed serious conceptual tensions in contemporaryregulatory takings doctrine.

18 Armstrong v. United States, 364 U.S. 40, 49 (1960).19 See U.S. CONST. amend. I ("Congress shall make no law.., abridging the freedom

of speech").20 See Carol M. Rose, Mahon Reconstructed: Why the Takings Issue Is Still a Muddle, 57 S.

CAL. L. REV. 561 (1984); see also Louise A. Halper, Why the Nuisance Knot Can't Undo theTakings Muddle, 28 IND. L. REV. 329 (1995).

21 533 U.S. 606 (2001).

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The nineteenth-century cases should dispel any notion that PennCentral's "muddle" is a necessary or inevitable legal development.Rather, they suggest, the doctrinal problems that have accretedaround Penn Central over the last 25 years are a muddle of Penn Cen-tral's making. While the idea of a "regulatory taking" is often de-scribed now as a contradiction in terms, it does not need to be.Takings law gets muddled only when it applies a certain kind of utilita-rian property theory to regulatory takings. In Property, Utility, and Fair-ness, Frank Michelman concluded that "the harm-benefit distinctionwas illusory as long as efficiency was to be taken as the justifying pur-pose of a collective measure. '2 2 This Article suggests thatMichelman's conclusion is only as sound as his normative premise.He assumes that his Article's utilitarian definition of social efficiencyought to determine when the government "regulates" and when it"takes." Penn Central and subsequent cases follow a utilitarian theoryof property regulation much like Michelman's. Regulatory takingslaw applies internally coherent standards under the natural-right ap-proach; it does not under Michelman's and Penn Central'sassumptions.

Specifically, the natural-right approach suggests that Penn Cen-tral's approach breaks down because it does not go far enough in re-specting the social good associated with "freedom of action" inproperty rights. If one could ask nineteenth-century jurists to reducethe natural-right approach to a slogan, they might say that the objectof all property regulation is to secure to every owner an "equal shareof freedom of action" over her own property. On this understanding,every owner is entitled to some zone of non-interference in which touse her possessions industriously, productively, and consistent withthe health, safety, property, and moral needs of her neighbors. Thisconcept of "equal and free action" is foreign to most contemporaryreaders, but it has dramatic consequences for understanding the PennCentral muddle.

From the natural-right perspective, Penn Central breaks down be-cause it does not use free action over property to mediate betweenindividual property rights and government social action. To settleregulatory takings claims, Penn Central balances the owner's lost eco-nomic value and expectations against the social value the governmenthopes to gain by regulation.23 Even though the natural-right perspec-tive would see utility as a happy consequence of good regulation, notas an end in itself, it can still critique Penn Central's utility balancing.From that perspective, Penn Central breaks down when it instructs

22 Frank I. Michelman, Property, Utility, and Fairness: Comments on the Ethical Foundations

of 'Just Compensation" Law, 80 HARV. L. Rivv. 1165, 1235 (1967).23 See Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 124 (1978).

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courts not to be judgmental when they weigh the social value of regu-lation. Invoking deferential "rational basis" principles, Penn Central re-quires courts instead to presume that regulation has high social valuewhenever it is "reasonably related to the promotion of the generalwelfare." 24 Other balancing tests in property law, by contrast, dis-count the social value of a given land use if it interferes with owners'free action over their property. In nuisance law, for instance, the Re-statement of Torts suggests that "it is in the general public interest topermit the free play of individual initiative within limits" and that"freedom of conduct has some social value although in [a] particularcase the conduct may not produce any immediate or direct publicbenefit."25

Takings law could get out of the Penn Central muddle by recogniz-ing that what the Restatement of Torts calls "individual initiative" and"freedom of conduct" goes a long way in shaping what Penn Centralcalls "the character of the governmental action." 26 On Penn Central'sfacts, for instance, one would have to discount the social value or char-acter of a historic-preservation law to the extent that it scares localowners into worrying that they will no longer be able to change orexpand the uses they make of their properties. In practice, that dis-counting would reduce to two separate, workable doctrinal inquiries.One inquiry would focus on whether a historic-preservation law di-rectly and reasonably controls some nuisance like a health threat orpollution problem. The other would focus on whether such a law en-larges affected owners' remaining property rights in ways that com-pensate them for the use and development rights it strips from them.Since the answers to both inquiries would almost certainly be "No," ahistoric-preservation law would not promote social utility unless it firstcompensated local owners for the demoralization costs they would suf-fer from losing some of the free use of their property.

Because such an approach is coherent and workable, we shouldnot blithely assume that Penn Central's "essentially ad hoc, factual in-quiries" 27 are the best we can hope for in regulatory takings law.Rather, even if we prefer Penn Central's property theory to any otheralternative, we must accept that some serious doctrinal costs weighdown Penn Central's advantages. In its justifications, the Penn Centralapproach is admittedly standardless. In its consequences, it leads toall-or-nothing results, awarding nothing much more often than itawards anything. By writing the concept of "equal freedom of action"over property out of regulatory takings law, Penn Central makes it

24 See id. at 131.25 RESTATEMENT (SECOND) OF TORTS § 828 cmt. e (1979).26 Penn Central, 438 U.S. at 124.27 Id.

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cheaper for the government to pursue a wide range of social actions itcould not afford under the natural-right approach. It probably alsofacilitates transfers of property-use rights that the natural-right ap-proach would forbid. This Article does not assess which of these twoapproaches promotes better policy. But it does show that the PennCentral approach cannot be defended solely on the ground that thelaw cannot do any better.

2. A New and Old Approach to State Regulatory Takings Law

This Article focuses on Penn Central and the main cases in federalregulatory takings law, but it probably has even more far-reachingramifications for state takings law. In constitutional law, legal scholar-ship and classroom teaching both tend to focus on U.S. SupremeCourt decisions, which are often written by first-rate legal thinkers andin any case are always final. When it comes to regulatory takings, how-ever, federal law is not the best place to start. Because the FifthAmendment does not apply directly to state eminent-domain proceed-ings, the federal courts did not even begin to fashion regulatory-tak-ings principles until early in the twentieth century. 28 Meanwhile, statecourts had been developing a coherent and unified doctrine for morethan a century. 29

Nineteenth-century state court judges did not wait for Chief Jus-tice Marshall and Justice Story to solve the problems in regulatory tak-ings law for them. Modern-day state court judges need not wait on theU.S. Supreme Court to work out the kinks in federal regulatory tak-ings law now. Nor do modern-day state legislatures, many of whichhave drafted just-compensation statutes to correct the problems oftenassociated with Penn Central.30 Again, this Article makes no final claimabout whether Penn Central's approach to regulatory takings promotessound policy. But the nineteenth-century cases should help statecourts clarify the substantive issues to consider before using Penn Cen-tral as persuasive authority to interpret state takings clauses. Federaltakings guarantees set a constitutionally guaranteed floor, not a con-stitutionally mandated ceiling."' If state officials think that Penn Cen-tral is too muddled, or that it unfairly denies owners compensation in

28 See discussion infra Part lII.29 See discussion infra Part II.30 See Mark W. Cordes, Leapfrogging the Constitution: The Rise of State Takings Legislation,

24 ECOLOGY L.Q. 187 (1997).811 See, e.g., PruneYard Shopping Ctr. v. Robins, 447 U.S. 74, 80-81 (1980) (announc-

ing that federal law, including the Constitution, "does not ... limit the authority of theState to exercise its police power or its sovereign right to adopt in its own Constitutionindividual liberties more expansive than those conferred by the Federal Constitution"); seeal.SoJOHN E. NOWAK & RONALD D. ROTUNDA, CONSTITUTIONAL LAW § 1.6(c), at 19 (5th ed.1995) ("[S]tate courts are always free to grant individuals more rights than those guaran-teed by the Constitution, provided [they] do[ ] so on the basis of state law.").

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some cases, they can develop state takings law to bring more clarityand fairness to the takings protections in their states.

3. Introducing Equality and Freedom as Standards in Takings Law

The nineteenth-century cases also provide two new standards forevaluating not only Penn Central, but any other approach to takingslaw. Utilitarianism and personhood now provide the two main justifi-cations for property rights. On one hand, the nineteenth-centurycases show why a utilitarian account of property might require theequal and free use of property. Founding Era natural-right theorystarted from the insight that people rely on having free control overtheir labor and their external possessions. If this insight is substan-tially correct, that reliance must count heavily in a utilitarian justifica-tion of property.

Because natural-right theory places so much weight on the con-cept of equal freedom of action, the nineteenth-century cases antici-pate the account of the police power and regulatory takingsdeveloped by Richard Epstein. He starts from utilitarian Lockeanpremises, 32 especially the insight that "[i] n most cases, the right to useone's own land freely is more important than the right to veto one'sneighbor's use of his land."33 He then traces two separate justifica-tions for government takings, nuisance control and implicit in-kindcompensation.3 4 These justifications closely track the two justifica-tions for property "regulations" used by nineteenth-century Americanstate jurists. As this Article suggests, there are subtle differences be-tween Epstein's approach and the nineteenth-century approach.From the natural-right perspective, Epstein at times underestimatesthe moral obligations inherent in property rights. The two ap-proaches also part ways on the ultimate relation between utility andfreedom. Epstein encourages freedom primarily because it is sociallyuseful, while the American natural-right approach treated utility as ahappy consequence that followed when individuals exercised freedommorally.3 5 Still, the nineteenth-century cases confirm Epstein's basicinsight: if people place great utility in freedom, and particularly in thefree use of property, takings law must draw principled distinctionsamong regulations that abate abuses of property rights, those that pro-

32 See RICHARD A. EPSTEIN, TAKINGS: PRIVATE PROPERTY AND THE POWER OF EMINENT

DOMAIN 9-18 (1985) [hereinafter EPSTEIN, TAKINGS].

33 Richard A. Epstein, Lucas v. South Carolina Coastal Council: A Tangled Web of Expec-tations, 45 STAN. L. REV. 1369, 1386 (1993).

34 See EPSTEIN, TAKINGS, supra note 32, at 108-25, 195-215.3'5 For Epstein's thoughts on the similarities and differences in the two approaches,

see Richard A. Epstein, The "Necessary" Histoy of Property and Liberty, 6 CHAPMAN L. REV.

(2003).

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vide implicit in-kind compensation, and those that reduce social wel-fare because they do neither.

On the other hand, the nineteenth-century reconciliation may beof even more interest to scholars who seek to ground property rightsin personhood. Utilitarian property theory dominates property schol-arship today, but a small band of dissenters insists that property is bet-ter understood as an extension of the human person. As MargaretRadin explains, "Although explicit elaboration of this perspective iswanting in modern writing on property, the personhood perspectiveis often implicit in the connections that courts and commentators findbetween property and privacy or between property and liberty. 3 6

This perspective seems persuasive in areas like copyright or celebrityprivacy, where personhood assumes particular significance. 37 How-ever, it does not yet extend to many other areas of property law, in-cluding the law of takings. This deficiency is unfortunate because"the personhood perspective can also serve as an explicit source ofvalues for making moral distinctions in property disputes, and hencefor either justifying or criticizing current law."38

Nineteenth-century natural-right theory provides a personhood-based account of regulatory takings. Considering property rights assimple extensions of a person's absolute freedom, the natural-rightaccount generates a prepolitical and prelegal conception of property.When a person owns an external possession, she also enjoys a series ofrights in relation to that possession, which allow her to enlarge herfreedom to satisfy her wants and manifest her personal talents. Butthe theory is also practical and prudential. It identifies as the "natu-ral" legal state the regime that does more than any other feasible re-gime to secure personal freedom. Because this theory is practical and

3C6 Margaret Jane Radin, Property and Personhood, 34 STAN. L. REv. 957, 957 (1982)

(footnotes omitted).37 See, e.g., George M. Armstrong, Jr., The Reification of Celebrity: Persona as Property, 51

LA. L. REv. 443 (1991).38 Radin, supra note 36, at 957. Radin grounds her account in Hegel's philosophy,

disclaiming any intent to "emphasize how the notion of personhood might figure in themost prevalent traditional lines of liberal property theory," especially "the Lockean labor-desert theory." Id. at 958. As should become clear in Part 1, American natural-right theoryis quite Lockean, though it is also influenced by medieval and early Enlightenment natural-law writers. The difference in theoretical approach makes for important differences inpractice. Radin's account tends to preclude owners from holding property in "fungible"goods-objects not "closely related to one's personhood" but instead "held for purely in-strumental reasons." Id. at 960-61; see id. at 986-88. The American natural-right accountrecognized property in so-called "fungible" goods, by contrast, because people can usefungible goods as or even more effectively than so-called "personal" goods to fulfill the firstobject of property rights-to secure the owner's self-preservation by production and acqui-sition. Still, any differences between Radin's work and the Founders' approach do notmake one or the other any less of a "personhood" theory of property; rather, such differ-ences suggest that the Founders analyzed the persona differently from Hegel and Radin'sinterpretation of Hegel.

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prudential, it can reconcile seemingly "absolute" personal rights withneighbors' individual rights and the needs of community living. Itorders property in relation to rights and responsibilities that are moreessential to one's person, such as health, safety, and morals. Onceproperty has been so ordered, equality principles then order each in-dividual's property rights in relation to the rights of other owners.

We may doubt whether freedom and equality should set stan-dards for takings law. We may also question the specific conceptionsof equality and freedom that nineteenth-century jurists applied. But ifthese conceptions have merit, and if the insights they make aboutproperty, personhood, and community living are accurate, the nine-teenth-century approach to takings represents a marked improvementover the approach we apply now.

4. Nineteenth-Century Regulatory Takings Principles and theOriginal Intent Behind the Takings Clause

Finally, this Article contributes to the debate over the historicalmeaning of the Takings Clause in the Fifth Amendment. Lucas, de-cided in 1992, provoked intense scholarly interest in determining howthe Founders and early Americans originally understood the TakingsClause.3 9 Founding Era natural-right theory could easily generate aprincipled distinction between regulations and regulatory takings.While this distinction was more or less latent at the Founding, statecourt jurists gradually made it patent over the course of the nine-teenth century. Their decisions presupposed that constitutional prop-erty protections invited them to distinguish between laws that"regulated" property and laws that "invaded" and thus took propertyby restraining property-use rights for purposes not related to thepower to regulate. This theoretical distinction deserves considerationas at least one factor shaping the original understanding of the Tak-ings Clause.

It may seem ironic that an Article about early American takingslaw should draw such a tentative conclusion about the historical mean-ing of the Takings Clause. Still, the originalism debate covers manymore sources of historical evidence than the cases studied in this Arti-cle. This Article concentrates on what we would now call "regulatorytakings" cases, but those cases constitute a fairly thin slice of nine-teenth-century eminent-domain law. Other scholars, especially Wil-

39 For a recent summary of and contribution to that debate, see Andrew S. Gold,Regulatory Takings and Original Intent: The Direct, Physical Takings Thesis "Goes Too Far," 49AM. U. L. REv. 181 (1999).

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liam Stoebuck, 40 William Michael Treanor,41 and Kris Kobach, 42 haveexamined what are now called "consequential damage" cases. Inthese cases, property owners complained not that the governmentabused its power to regulate, but that it inflicted a publicly-sponsorednuisance on their properties. Though less relevant to the originalismdebate, these cases are numerous and do not paint as clear a portraitas the cases studied here.43 Separately, John Hart has studied colonialland-use practices and concluded that the Founders regulated landuse too closely to make room for regulatory takings principles withany bite.44 William Novak conducted a similar study of state land-useregulation over the first half of the nineteenth century and, though hewas not explicit on this point, he hinted at conclusions similar toHart's.

45

This Article does not examine all the sources covered in thisscholarship, but it does warn that those sources should be reread care-fully. This Article shows that modern scholars read nineteenth-cen-tury regulatory takings decisions anachronistically, their judgmentsshaped by the utilitarian commitments that currently predominate inproperty law. Modern readers are not sensitive enough to the ways inwhich natural-right theory gave content to key concepts like "privateproperty," "regulation," "takings," and the relation between "privaterights and the public good." It may be that much of the other scholar-ship about early American land use practice repeats these same anach-ronistic misunderstandings. For instance, in his book The People'sWelfare, Novak sets out to prove that there was an "overwhelming pres-ence of regulatory governance" in American life during the early nine-teenth century. 46 The examples Novak gives, however, closely track aconception of the police powers similar to the portrait sketched in

40 William B. Stoebuck, A General Theory of Eminent Domain, 47 WASH. L. REv. 553

(1972).41 William Michael Treanor, The Original Understanding of the Takings Clause and the

Political Process, 95 COLUM. L. REV. 782 (1995).42 Kris W. Kobach, The Origins of Regulatory Takings: Setting the Record Straight, 1996

UTAH L. REV. 1211.43- The New Hampshire Supreme Court canvassed the takings issues raised and the

various lines of precedent addressing these issues in Eaton v. Boston, Concord, & MontrealR.R., 51 N.H. 504 (1872).

44 SeeJohn F. Hart, Colonial Land Use Law and Its Significance for Modern Takings Doc-trine, 109 HARV. L. REV. 1252 (1996) [hereinafter Hart, Colonial]; John F. Hart, Land UseLaw in the Early Republic and the Original Meaning of the Takings Clause, 94 Nw. U. L. REV.

1099 (2000) [hereinafter Hart, Original Meaning].45 See WILLIAM J. NOVAK, THE PEOPLE'S WELFARE: LAW AND REGULATION IN NINE-

TEENTH-CENTURY AMERICA (1996).46 Id. at 6.

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Part II of this Article: health and safety laws, 47 public morals con-trols,48 and laws regulating the use of public commons. 49

Of course, it is entirely possible that the state lawmakers whoselegislation Novak studies were practicing a theory of regulation mark-edly different from the natural-right theory that state judges werepreaching from the bench. The same possibility holds for the work ofscholars like Hart, Treanor, and the others mentioned above. But wewill not know definitively until the original sources they cite are stud-ied with closer care.

Separately, the originalism debate raises issues that go beyond thescope of this Article regarding what it means to recover the original"understanding," "meaning," or "intentions" of the Takings Clause.This Article uses "originalism" roughly to classify several different ap-proaches to studying historical sources. At one extreme, "original in-tention" studies try to determine the meaning and scope of a legalclause by studying how the drafters intended the clause to apply tospecific situations. 50 This side of the originalist spectrum tries to re-cover what Gary Lawson calls "a concrete, subjective understanding-either of some privileged group of founders or ratifiers or of somemore amorphous general public."5 1 In the regulatory takings field,Andrew Gold has used such a methodology to conclude that the origi-nal understanding of the Takings Clause "quite possibl [y]" applied toregulations,52 while Hart's work suggests that the Clause was not origi-nally intended to apply to regulations. 53

At the other extreme, "original meaning" studies concentrate onusing historical sources to recover the objective meaning of a clause'sterms. Lawson describes this side of the spectrum "as the understand-ing that the general public would have had if all relevant informationand arguments had been brought to its attention. ' 54 Original-mean-ing analysis differs sharply from original-intention analysis because itallows for what Lawson calls the possibility that "documents can havemeanings that are latent in their language and structure even if they

47 See id. at 51-82, 191-234; discussion infra Part II.B.48 See NOVAK, supra note 45, at 149-90; discussion infra Part II.C.

49 See NOVAK, supra note 45, at 83-148; discussion infra Part II.E.50 See Antonin Scalia, Originalism: The Lesser Evil, 57 U. CIN. L. REV. 849 (1989).

51 Gary Lawson, Delegation and Original Meaning, 88 VA. L. REv. 327, 341 n.51 (2002).

52 See Gold, supra note 39, at 185-86, 240-42.

53 See Hart, Original Meaning, supra note 44. Hart's scholarship is relevant to bothoriginal-intent and original-meaning inquiries, but more to the former than the latter.Hart tends to measure the intentions of the Takings Clause by the intentions and practicesof legislators who legislated around the same time as the ratification of the Takings Clause.See id. at 1133-47.

54 Lawson, supra note 51. Randy E. Barnett has defended this approach to interpreta-tion in An Originalism for Nonoriginalists, 45 Lov. L. REV. 611 (1999).

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are not obvious to observers at a specific moment in time. '55 WhenEpstein defends his reading of the Takings Clause in light of contem-porary principles of constitutional interpretation, his defense accordswith this understanding of "original meaning" methodology. 56

The materials studied in this Article are generally more relevantto an original-meaning interpretation of the Takings Clause than toan original-intent interpretation. The regulatory takings decisionssuggest that the Founders and several generations of early Americanjurists understood and subscribed to a distinction in political theorybetween property regulations and regulatory invasions of propertyrights. To be sure, this distinction is not the only piece of evidence toconsider, and original-meaning scholars should consider all the evi-dence before relying on the theory of takings presented here. In par-ticular, the distinction in political principle between "regulations" and"invasions of right" surfaced during the Founding, but it took statecourt judges several generations after the ratification of the FifthAmendment to apply this theoretical distinction to the kinds of prop-erty-use restrictions that comprise the bulk of regulatory takings lawnow.

Still, these courts' decisions are probative even if they are notconclusive. They help to answer, in Lawson and Guy Seidman'swords, whether "the seemingly transparent meaning of the [plain]language [of the Takings Clause] .. .conceal [s] a deeper, more tech-nical meaning. ' 57 The nineteenth-century cases help decipher theTakings Clause for the same reasons that a nineteenth-century Greekwork would help capture the nuances of a term of art in an eight-eenth-century Greek writing. Even if these cases were not contempo-raneous with the ratification of the Takings Clause, natural-righttheory was quite familiar to both the Founders and nineteenth-cen-turyjurists. To most contemporary scholars, by contrast, natural-righttheory just reads like Greek.

The theory and cases analyzed in this Article are less important toan original-intent inquiry, which seeks to define what the TakingsClause's drafters subjectively meant by what they did when they regu-lated land use themselves. The nineteenth-century cases studied hereprobably come too late to be relevant to an original-intent inquiry.Furthermore, this inquiry would read the Takings Clause not to callinto question land-use practices widely accepted at the Founding.Thus, if colonial and early American local land-use laws regularlystripped land owners of use rights for purposes that strayed beyond

55 Lawson, supra note 51, at 341 n.51.56 See EPSTEIN, TAKINGS, supra note 32, at 19-31.57 See Gary Lawson & Guy Seidnan, Taking Notes: Subpoenas and Just Compensation, 66

U. CHI. L. REV. 1081, 1086 (1999).

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the principles of nuisance control and equal-benefit regulation, onemight disregard the materials studied here and still conclude, as Hartdoes, that the Takings Clause was not intended to cover regulations. 5

1

In either case, anyone interested in knowing whether there is histori-cal authority for the idea of a regulatory taking must take account ofFounding Era political theory and the cases considered in this Article.

D. The Argument

The argument in this Article proceeds as follows. Parts I and IIdevelop the natural-right distinction between bona fide "regulations"and regulatory "invasions of right." Drawing on leading cases andtreatises from the fifty years after the Founding, Part I explains howthe Founders and the first generation of American law-treatise authorsused social-compact and natural-right principles to justify propertyrights, constitutional takings protections, and limit property "regula-tions." Part II closely studies nineteenth-century state regulatory tak-ings cases. These cases reflect the same understanding of propertyrights and the objects of regulation as the social-compact and natural-right principles analyzed in Part I.

Because the nineteenth-century law differs dramatically frommodern federal law, Parts III and IV trace the development of modernfederal regulatory takings law and critique it using the theoreticalprinciples and legal standards traced in Parts I and II. Part III focuseson the cases of the Progressive Era, the substantive due process deci-sions from the 1910s and 1920s that set the stage for Penn Central later.These cases are crucial for several reasons. From a historical perspec-tive, these decisions shed a great deal of light on why and how thestandards that dominated in the state courts during the nineteenthcentury never took hold in federal law during the twentieth. From atheoretical perspective, the Progressive Era decisions present most ofthe thorniest substantive questions for any theory of regulatory tak-ings. These cases seem to confirm the intuition that the best that reg-ulatory takings law can do is balance the property rights of ownersagainst the regulatory interests of the state and then punt.

Finally, Part IV compares and contrasts the Penn Central takingsapproach with the nineteenth-century approach. This Part recountsthe problems that have accumulated under the law and scholarshipsince Penn Central, giving particularly close attention to the main regu-latory takings cases of the last decade-Lucas, Palazzolo, decided twoTerms ago, and Tahoe-Sierra, decided in 2002. It identifies the doctri-nal problems that have arisen under Penn Central, and suggests thatthe nineteenth-century state cases handle these problems much more

58 See Hart, Colonial, supra note 44; Hart, Original Meaning, supra note 44.

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cleanly from a doctrinal perspective than do Penn Central and itsprogeny.

IREGULATIONS AND TAKINGS IN NATURAL-RIGHT THEORY

A. The Social Compact

According to the standard story in takings law, the whole idea of a"regulatory taking" was regarded as an oxymoron for more than 130years. There was no such conceptual category, the story continues,until in a moment of distraction or senility Justice Oliver WendellHolmes created the doctrine in the 1922 decision Pennsylvania CoalCo. v. Mahon.59 As Justice Blackmun argued in Lucas v. South CarolinaCoastal Council, regulatory takings ideas are not supposed to have apedigree in any American "'historical compact' or 'understanding ofour citizens."' 6 0

Nevertheless, there was a "historical compact" justifying regula-tory takings ideas-what early Americans knew as the "social com-pact." Up through the early twentieth century, courts drew uponnatural-right principles to define the "private property" covered bytakings guarantees and to draw a principled line between "takings"and "regulations." Now, on the rare occasions that scholars have rec-ognized the connection between natural-right ideas and takings prin-ciples, they have not taken such ideas seriously. Like WilliamStoebuck a generation ago, they suppose that the term "natural law""is almost meaningless; it is an empty vessel into which one can pouralmost anything." 6' For the Founders, however, the idea of a natural

59 See 260 U.S. 393 (1922). For examples portraying Mahon as originating regulatorytakings doctrine, see Leslie Bender, The Takings Clause: Principles or Politics?, 34 BUFF. L.REV. 735, 770-74 (1985); Raymond R. Coletta, Reciprocity of Advantage and Regulatory Tak-ings: Toward a New Theory of Takings Jurisprudence, 40 Am. U. L. REV. 297, 300 (1990); AndreaL. Peterson, The Takings Clause: In Search of Underlying Principles: Part I-A Critique of CurrentTakings Clause Doctrine, 77 CAL. L. REV. 1299, 1325 (1989); Alfred P. Levitt, Comment, Tak-ing on a New Direction: The Rehnquist-Scalia Approach to Regulatory Takings, 66 TEMP. L. REv.197, 203-04 (1993).

60 Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1060 (1992) (Blackmun, J.,dissenting).

61 Stoebuck, supra note 40, at 573-74. J.A.C. Grant did and Douglas Kmiec does ap-preciate how important natural-law and -right theory was to early takings law. SeeJ.A.C.Grant, The "Higher Law" Background of the Law of Eminent Domain, 6 Wis. L. REV. 67, 70-81(1931); Douglas W. Kmiec, The Coherence of the Natural Law of Property, 26 VAL. U. L. REV.367 (1991). That said, neither author focuses on nineteenth-century "regulatory takings"cases as systematically as this Article does, and neither explains in detail how natural-lawtheory defines "private property" and "takings" when a regulation strips use rights associ-ated with a physical asset or labor. Paul J. Otterstedt does a thorough job with the latterissue in A Natural Rights Approach to Regulatory Takings, 7 TEX. REV. L. & POL. 25 (2002).Otterstedt's Article, however, does not connect natural-law principles to nineteenth-cen-tury state takings law, and it does not contrast those principles with the theoretical chal-lenges considered in Parts III and IV of this Article.

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right delineated a series of principles that governed how that rightshould be regulated.

The social compact carried with it powerful consequences for reg-ulation because it denoted a partnership among people pledged totheir mutual betterment. Three of the characteristics that distinguishman from the other animals are his reason, his freedom, and his con-science. 62 These characteristics give man an inherent object-to be-come the kind of person who can enjoy his freedom morally andrationally. Man enjoys the power to choose his course of action, but healso has some sense that objects of his free choice should be reasonedand right.63 The social compact exists because people need help toenjoy freedom and to cultivate their faculties for reasoning and mak-ing moral judgments. 64 Civil society is supposed to protect its mem-bers' basic personal rights (to life, person, and property), to clarify byits mores and laws the truly good objects in human life, and to createconditions in which all of its members may pursue true happiness inall its forms.6 5

The objects of the social compact obligate citizens and govern-ment alike. Every citizen is expected to qualify his own freedom will-ingly when doing so will benefit the partnership, namely civil societyand his fellow partners. Likewise, the social compact requires govern-ment to take only those actions consistent with the object of the part-nership. Specifically, government must secure to all citizens theopportunity to exercise their freedom in an ordered and moral way.

6 6

In the same vein, when government secures natural rights, it mustdo so on an equal basis for every citizen. Because all men are free,rational, and moral animals, they are equally entitled to their naturalrights. They are all entitled to pursue the various goods of life consis-tent with moral directions that will prevent them from misusing theirliberty. As explained in 1791-1792 law lectures by James Wilson-asigner of the Declaration of Independence, a member of the Constitu-tional Convention, and an early Supreme Court Justice-the idea of"equality" does not mean that all men are equal in "their virtues, theirtalents, their dispositions, or their acquirements. ''67 Still, Wilson ex-plains, "there is an equality in rights and in obligations," and every

62 See JAMES WILSON, Lectures on Law, in I THE WORKS OF JAMES WILSON 69, 228-29(Robert Green McCloskey ed., 1967).

63 See id. at 232.64 See id. at 242.65 See id. at 227-42; NATHANIEL CHIPMAN, PRINCIPLES OF GOVERNMENT 32-38, 51-54

(1833); 1 ZEPHANIAH SwIFT, A SYSTEM OF THE LAWS OF THE STATE OF CONNECTICUT 7-18(1795); Eric R. Claeys, Property, Morality, and Society in Founding Era Legal Treatises, at 6-10(Aug. 30, 2002), http://apsaproceedings.cup.org/Site/papers/068/O68008CIaeysEric.pdf

66 See CHIPMAN, supra note 65, at 59; 1 Swivr, supra note 65, at 12-13; 1 WILSON, supranote 62, at 238, 241-42; Claeys, supra note 65, at 10-13.

67 See I WILSON, supra note 62, at 240.

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person "has a right to exert those powers for the accomplishment ofthose purposes, in such a manner, and upon such objects, as his incli-nation and judgment shall direct; provided he does no injury toothers; and provided more public[ ] interests do not demand hislabours.

68

B. Property Rights

Within these broad outlines, one of the primary objects of thesocial compact is to protect the individual and natural right to prop-erty. Property is a "natural"-inherent, prepolitical, and prelegal-right because its pursuit secures a wide range of natural goods. Thesegoods include self-preservation, the preservation of one's family, andthe wealth needed to practice other virtues that require some mini-mum of material support.69 According to Wilson, then, propertyrights need to be protected because these acquisitive and productivetendencies

would be rendered ineffectual, if we were not secured in the posses-sion of those stores which we collect; for no one would toil to accu-mulate what he could not possess in security. This security isafforded by the moral sense, which dictates to all men, that goodscollected by the labour and industry of individuals are their prop-erty; and that property ought to be inviolable.7 0

M

Because property rights must protect these acquisitive and indus-trious tendencies, they must cover the full range of rights associatedwith property. Thus, civil society is obligated to secure not only theright to own property, but all of the legitimate attributes commonlyassociated with ownership. 71 In a 1796 treatise restating Connecticutlaw, Connecticut Supreme Court Justice Zephaniah Swift borrowedfrom Blackstone to describe these rights as the trinity of disposition,use, and control.72

68 Id. at 241-42; see also I Swivr, supra note 65, at 17-18 ("Men at their birth are allvested with equal rights, but are endowed with unequal powers.... We shall find that theoperation of these equal laws will be the establishment of a gradation of ranks, and avariety of conditions, essential to the existence of society, and productive of the greatesthappiness.").

" 9 SeeJAMES WILSON, On the History of Property, in 2 THE WORKS OFJAMES WILSON, supranote 62, at 711, 718-19.

70 1 WILSON, supra note 62, at 233.71 See 2 KEN'r, supra note 7, at 257-58; 2 WILSON, supra note 62, at 719; Claeys, supra

note 65, at 14.72 See I Sw r, supra note 65, at 182; see also I WILLIAM BLtACKsrONE, COMMENTARIES

134 (1765) ("The third absoltte right, inherent in every Englishman, is that of property:which consists in the free use, enjoyment, and disposal of all his acquisitions, without anycontrol or diminution, save only by the laws of the land."); cf Adam Mossoff, Property:Putting the Pieces Back Together, 45 ARiZ. L. REV. (forthcoming 2003) (manuscript at 7, on filewith author) (identifying "acquisition, use, and disposal" as fundamental elements of the"integrated theory of property").

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At the same time, members of society do not enjoy a natural rightto every conceivable power of disposition, use, or control that theymight enjoy if they had no neighbors. As put by Chancellor JamesKent, a New York jurist, in his leading nineteenth-century treatise Com-mentaries on American Law, " [e]very individual has as much freedom inthe acquisition, use, and disposition of his property, as is consistentwith good order, and the reciprocal rights of others."73 Because every-one in society enjoys the right to property and is the moral equal ofother members, each enjoys the freedom to use, control, and disposeof property on equal terms with his neighbors. Hence, JamesMadison, author of the Takings Clause, 74 could argue in a politicalessay that property, "[i]n its larger and juster meaning .... embracesevery thing to which a man may attach a value and have a right; andwhich leaves to every one else the like advantage.'75

C. Takings

Ordinarily, government protects property rights by ordering howproperty may be disposed of and by protecting people's right to useand control their own property. On occasion, however, when thepublic good demands it, government may take property from a few forthe community's general benefit. All benefit from public projects likehighways and canals, but these projects cannot be constructed withoutdislocating some individuals' property. The social compact gives gov-ernment the power to take property because, as Kent explains, "theinterest of the public is deemed paramount to that of any privateindividual. '76

Nonetheless, although the public good justifies and requiresthese takings, they still infringe on citizens' property rights. As a mat-ter of justice, the owners deserve compensation for the rights theyhave lost. The social compact may obligate an owner to exchange hisproperty for the public's benefit, but it cannot force the owner to re-linquish it for free. This protection, Kent emphasizes, "is founded innatural equity, and is laid down by jurists as an acknowledged princi-ple of universal law." 77

This limitation is so important that it needs to be established asfundamental constitutional law. Specifically, a constitutional limita-tion anticipates the danger that a local majority might co-opt the legis-lature and persuade it to seize the property of a minority without

73 2 KENT, supra note 7, at 328.74 Hart, Original Meaning, supra note 44, at 1136.75 Property, NAT'L GAZETTE, Mar. 27, 1792, at 174, reprinted in 14 THE PAPERS OFJAMES

MADISON 266 (Robert A. Rutland et al. eds., 1983).76 2 KENT, supra note 7, at 339.77 Id. (footnote omitted).

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paying compensation. Justice William Patterson, an early member ofthe U.S. Supreme Court, authored the 1795 case Vanhorne's Lessee v.Dorrance, one of the first takings cases and one of the first instances ofjudicial constitutional review. As Justice Patterson explained, "[t] heConstitution is certain and fixed; it contains the permanent will of thepeople, and is the supreme law of the land .... It says to legislators,thus far ye shall go and no further."7 Thus, while "[elvery personought to contribute his proportion for public purposes and public exi-gencies," a constitutional takings clause institutes the principle that"no one can be called upon to surrender or sacrifice his whole prop-erty, real and personal, for the good of the community, without receiv-ing a recompence in value. This would be laying a burden upon anindividual, which ought to be sustained by the society at large."79

Compensation was considered not only a requirement of naturaljustice, but also an indispensable tool for maintaining American char-acter. According to Justice Patterson, constitutional property protec-tions do for the legislature (and the people at large) what law does forthe individual: restrain, direct, and even teach people to follow theirtrue interests.80 If a people voluntarily respect the injunction not toconfiscate the property of any group of citizens, they make it muchmore likely that they can govern themselves. According to Justice Pat-terson, if government regulates property regularly, under general lawsin established tribunals, the law promotes "security and safety, tran-quility and peace. One man is not afraid of another, and no manafraid of the legislature." '81 But the more the people succumb to thetemptation to confiscate property, the more they undermine the con-ditions of self-government. If government can take property sud-denly, without paying compensation for the harms it inflicts, JusticePatterson asks rhetorically, "[i]f this be the Legislation of a Republi-can Government, in which the preservation of property is made sa-cred by the Constitution, I ask, wherein it differs from the mandate ofan Asiatic Prince? Omnipotence in legislation is despotism. '8 2

D. Regulations, Invasions of Right, and Regulatory Takings

These principles of property rights and eminent domain laydown standards by which to judge exercises of the police power, thepower to regulate. When a positive law stays within those standards, it"regulates" property. But when a law transgresses the limits on regula-tion, it takes more than a fair share of use rights and "injures," "in-

78 2 U.S. (2 Dall.) 304, 308, 311 (C.C.D Pa. 1795).79 Id. at 310.80 See id. at 311-12.81 Id. at 312.

82 Id. at 316.

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vades," or "violates" property rights just like a private trespass ornuisance. In principle, an invasive regulation is the same as a taking.

In the writings of Founding Era lawyers like Kent, Wilson, andMadison, "regulation" had a precise meaning. As this subpart and thenext Part show, regulations ordered the use of property to make surethat individuals exercised their legal rights in ways that accorded withtheir natural rights. Although property tends to be subject to unusu-ally heavy regulation, Nathaniel Chipman, a U.S. Senator and juristfrom Vermont, explained in an 1833 moral treatise that "[t] he rightof property itself, still remains founded in natural principle [s;]" all thepositive laws "serve only to bring the subjects of property within thoseprinciples."

83

"Regulations" secure to people in reality the equal share of free-dom to which they are entitled in principle. This is the sense in whichMadison speaks of regulation in Federalist 10. Shortly after emphasiz-ing that "the first object of government" is to protect "[tl he diversityin the faculties of men, from which the rights of property originate,"he explains that government secures such protection by "[t] he regula-tion of these various and interfering interests. '8 4

Put differently, a "regulation" is a positive law that prevents onecitizen from "injuring" another by stealing part of another's equalshare of freedom. The allocation of equal-use rights creates a baselineto distinguish innocent or beneficial property uses from harmful orinjurious ones. "Regulations" prevent the latter and encourage theformer. Thus, Justice Swift could assume "it as a maxim in legislation,that the rule to be adopted in enacting laws, must be to restrain noacts but those which tend to the injury of individuals and the dissolu-tion of government. '8 5 Similarly, Kent could assume that the lawgiverhas the power to issue "general regulations," because he "has a rightto prescribe the mode and manner of using [property], so far as maybe necessary to prevent the abuse of the right, to the injury or annoy-ance of others, or of the public. '8 6

In either case, whether one defines the power to regulate in rela-tion to enlarging property or preventing injuries, one can determinewhether a positive law is really a "regulation" by asking if it promotesequal freedom among all citizens. Because'all citizens are equally en-titled to the enjoyment of their natural rights, all property ownersmust respect a duty not to use their property to diminish others' natu-ral rights. As Justice Swift warns, "whether men possess the greatest,or the smallest talents, they have equal claims to protection, and se-

83 CHIPMAN, supra note 65, at 75.84 THE FEDERALIST No. 10, at 78-79 (James Madison) (Clinton Rossiter ed., 1961).85 1 Swivr, supra note 65, at 13.86 2 KENT, supra note 7, at 340.

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curity in their exertions, and acquisitions."' 7 When Madison says thatgovernment "secures to every man, whatever is his own," he empha-sizes that government must do so "impartially."88 When Kent speaks ofproperty rights, he stresses that such rights are consistent with "thereciprocal rights of others."8 9

These ideas of equality, impartiality, and reciprocity establish apowerful substantive limitation on government regulation. Becausethe social compact creates a partnership for the mutual improvementof morally equal partners, its laws must work to enlarge the advantageof every partner. Early in his Lectures on Law, Wilson explains asclearly as any other Founder how this principle applies: citizens entercivil society "to regulate, with one common consent, whatever regardstheir preservation, their security, their improvement, their happi-ness. ' 9° Still, Wilson admonishes that "[t] he natural rights and dutiesof man belong equally to all."9' 1 Later in the Lectures, he explains howpositive laws secure natural rights:

True it is, that, by the municipal law, some things may be prohib-ited, which are not prohibited by the law of nature: but equally trueit is, that, under a government which is wise and good, every citizenwill gain more liberty ... by the limitation of other men's freedom,than he can lose by the diminution of his own. He will gain more bythe enlarged and undisturbed exercise of his natural liberty in innu-merable instances, than he can lose by the restriction of it in afew.

2

When government violates this equal-advantage principle, Wilson says,natural liberty is "abridged," but when government follows this princi-ple, natural liberty is "increased and secured."9 Thus, "[a]s in civilsociety, previous to civil government, all men are equal; so, in thesame state, all men are free."9 4

Ultimately, the principle of equal freedom for all determineswhether a property law regulates or invades natural property rights.Whenever a positive law restrains a right incident to property owner-ship-whether control, use, or disposition-that law risks impermissi-bly abridging the free exercise of property rights. The law is not perse invalid, but the restraint on property requires further justification.The law can be justified as a bona fide "regulation" of property rightsif it restricts the use rights of every person in order to enlarge both the

87 1 Swiv-, supra note 65, at 17.88 14 THE PAPERS OF JAMES MADISON, Sulyrr note 75, at 266.89 2 KENT, supra note 7, at 328.9o 1 WILSON, supra note 62, at 239.91 1 id. at 241.92 2 id. at 587-88.

9'4 2 id. at 588.94 1 id. at 241.

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personal rights and freedom of action of everyone regulated. By con-trast, if some individuals lose more than their equal share of use rightswithout gain, the law is not a "regulation" of right, but rather an"abridgement," "invasion," or "violation" of right.

In his essay Property, James Madison-who drafted the TakingsClause95-writes that it "is not a just government, nor is property se-cure under it, where arbitrary restrictions, exemptions, and monopo-lies deny to part of its citizens ... free use of their faculties, and free

choice of their occupations."96 He cites as an example a law that fa-vors woolmaking by outlawing the manufacture of linen shrouds.' 7

For Madison, the linenmaker has prepolitical and prelegal "property"in the right to use his labor and possessions to make linen. '18 He has"property" both "in the general sense of the word" and because hisbusiness provides "the means of acquiring property strictly socalled."99 The wool-shroud law, however, does not regulate propertybecause it is "partial": It "den[ies] to part of [the] citizens [their] freeuse of their faculties."1 ° Madison concludes:

If there be a government then which prides itself in maintaining theinviolability of property; which provides that none shall be takendirectly even for public use without indemnification to the owner,and yet directly violates the property which individuals have in ...their faculties; ... such a government is not a pattern for the UnitedStates. 101

Thus, in principle, Madison thought that a partial regulation is as "di-rect" and offensive to property rights as a taking withoutcompensation.

Some scholars acknowledge that Madison thought regulationscould violate property rights at the level of political principle but stilldoubt whether he thought such regulations could violate the TakingsClause as a matter of constitutional law. For instance, while WilliamTreanor recognizes that Madison likened partial regulations to tak-ings in Property, he stresses that Madison never actually called such reg-ulations "takings." 11 2 Treanor concludes from this omission thatMadison meant to exclude the possibility that the Takings Clause ap-plies to regulations as a matter of constitutional law.'0 3

95 Hart, Oiginal Meaning, supra note 44, at 1136.96 14 THE PAPERS OF JAMES MADISON, supra note 75, at 267.

97 See id.98 See id.

99 Id.100 Id.

101 Id. at 267-68.102 See Treanor, supra note 41, at 840.

103 See id. at 838-39.

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This is a strained conclusion. Although Property tells us clearlythat Madison thought partial regulations violate property rights as amatter of principle, it says nothing about what he thought with respectto the constitutional law question. Treanor asks us to make an infer-ence: if Madison had thought the Takings Clause cast judicially en-forceable penumbras over property regulations, he would have madelegal arguments, not political arguments. Maybe, maybe not.Madison could trust his audience to agree that natural-right principlesset the measuring standard for both congressional legislation and theTakings Clause. He might not have needed to make constitutional-law arguments, not when he was appealing to a source with more fun-damental moral authority. A better way to answer the constitutional-law question is to examine how judges who subscribed to the sameviews about property and regulation as Madison applied these generalprinciples to specific laws that purported to regulate use rights.

IIREGULATORY TAKINGS DOCTRINE IN

THE NINETEENTH CENTURY

A. Overview

Nineteenth-century state case reports provide most of the earlyevidence showing how general natural-right ideas could be applied tolaws that restrain use rights in property while purporting to "regulate"it. In such challenges, courts did not limit constitutional propertyguarantees to physical takings. Nor did they send property ownersback to legislatures, as Treanor reads Madison to have suggested. 0 4

Instead, state courts used constitutional guarantees as broad outlinesinto which they fit a series of doctrines tailored to different govern-ment actions.

As Howard Gillman and Philip Hamburger have explained, nine-teenth-century judges read constitutions to codify broad principles ofnatural-law theory. Even though deemed permanently true, constitu-tional principles still left legislatures, executive officials, and judges todetermine how best to apply them to particular problems. 0 5 There-fore, officials were not supposed to read takings guarantees narrowlysimply because they did not include the magic words "regulations that

104 See id. at 840.105 See Howard Gillman, The Collapse of Constitutional Originalism and the Rise of the Notion

of the "Living Constitution" in the Course of American State-Building, 11 STUD. Am. POL. DEV.191, 197-213 (1997); Philip A. Hamburger, The Constitution's Accommodation of SocialChange, 88 MicH. L. REV. 239 (1989).

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strip owners of a fair and equal share of use rights," as the U.S. Su-preme Court does so often now. 10 6 As one court explained:

These provisions are not to be narrowed down by a literal construc-tion. They are to be largely and liberally expounded. Their objectis to secure the enjoyment of the rights to which they refer, andmust have an interpretation which will effect that object .... Anyother rule would place at the absolute disposal of the legislatureevery right intended to be secured and consecrated by the limita-tions [of the New York Constitution].l°7

The section of the New York Constitution to which this judge was re-ferring included not only the state's due process and takings clausesbut also its double jeopardy and self-incrimination clauses, much likethe Fifth Amendment in the Federal Constitution. 10 In other words,this judge stressed, if legislatures could not use technicalities to cir-cumvent the rights against double jeopardy or self-incrimination, theycould not similarly circumvent individual rights related to the powerof eminent domain. 10 9

That said, many of the "regulatory takings" cases this Partpresents are anomalous because they cite non-takings positive-law con-stitutional guarantees to review "takings" natural-law challenges.Many states did not ratify state constitutional takings guarantees untilthe 1840s. Even then, courts sometimes treated takings and due pro-cess guarantees interchangeably. Before the 1840s, state courts some-times relied on the Contracts Clause, 110 on the theory that states couldnot use their police powers to strip owners of the substance of prop-erty rights in land that the states had previously patented to the own-ers.1"' State courts also relied on general constitutional declarationsof property rights, constitutional limitations on state legislative pow-ers, and even the Federal Takings Clause, notwithstanding that theU.S. Supreme Court later declared the Clause inapplicable to thestates. 112 In a few cases, courts went so far as to hold-without anyspecific positive-law constitutional source-that legislative eminent-

106 See, e.g., Tahoe-Sierra Pres. Council v. Tahoe Reg'i Planning Agency, 122 S. Ct.1465, 1478 (2002) (commenting that the Takings Clause's "plain language requires thepayment of compensation whenever the government acquires private property for a publicpurpose, whether the acquisition is the result of a condemnation proceeding or a physicalappropriation," but adding that "the Constitution contains no comparable reference toregulations that prohibit a property owner from making certain uses of her privateproperty").

107 People v. Toynbee, 20 Barb. 168, 195 (N.Y. Gen. Term 1855) (Brown, J.).108 See U.S. CONsT. amend. V; N.Y. CONST. art. I,' § 6; Toynbee, 20 Barb. at 195.

109 See Toynbee, 20 Barb. at 195-96.

110 See U.S. CONST. art. I, § 10, cl. 1.

I1 See Fletcher v. Peck, 10 U.S. (6 Cranch) 87 (1810).112 See Barron v. Mayor of Bait., 32 U.S. (7 Pet.) 243 (1833).

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domain powers were limited by general principles of natural law.' '3

This fact may complicate attempts to use these cases to recover howthe Founders understood the original positive-law intentions behindthe Federal Takings Clause. Nonetheless, it is striking that natural-right ideas about property, takings, and regulations unified and di-rected the development of a uniform body of law, for a uniform prob-lem, even when courts in different states relied on a wide range ofpositive-law authorities. This uniformity refutes the idea that natural-right ideas were "an empty vessel into which one [could] pouranything." 1 4

To construe these different constitutional clauses to secure thenatural property rights judges expected them to secure, state courtsdeveloped several common themes. To begin with, all agreed that"private property" included all of the rights commonly associated withproperty-disposition, use, and control-limited only by the equalrights of others. In addition, judges agreed that there were two mainrationales by which property rules could be considered "regulations."One set of standards focused on what we now call "harm" or "nuisanceprevention." These standards controlled the abuse of property rightsthat occurred when owners grabbed more than their fair share of userights-for example, by threatening the public health, safety, morals,or commons, or by threatening neighbors' private-property rights. Afew cases ordered the free use of specific classes of property, giving allaffected owners more freedom over their own than they might havehad without legal regulation. Such laws restrained private property"for the common benefit of all," like the actions of a partnership ofequal partners.

Courts also developed different legal tests and different standardsof constitutional review to apply to various regulations. These differ-ences should come as no surprise, because the natural-right reasoningupon which these judges drew is both practical and prudential. Na-ture does not place us in a perfect world; the right to property is oneof several manifestations of the requirement that we must make thebest of it that we can. Thus, for instance, courts could "regulate"property rights through the common law of nuisance, or legislaturescould do the same by exercising the police power, but no law of na-ture says that one branch will always secure natural rights better thanthe others. In the same vein, when courts conducted constitutionaljudicial review of police-power regulation, they had to questionwhether the legislature was better suited to secure property rights inthe regulatory context under review. Courts thus developed different

113 See, e.g., Crenshaw v. Slate River Co., 27 Va. (6 Rand.) 245 (1828); discussion infra

notes 214-16 and accompanying text.114 Stoebuck, supra note 40, at 573-74.

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lines of doctrine and levels of scrutiny in applying a common under-standing of regulation to disparate property conflicts.

The following sections explore how different courts conceived ofproperty, how they conceived of the power to regulate, and how theyfashioned standards ofjudicial review to ensure that legislatures really"regulated" free and equal use rights while still respecting the advan-tages of legislation. The cases will be examined under four differentheadings of the police power: protecting the public health and safety,protecting the public morals and order, ordering the use of differentforms of private property, and protecting public commons andservitudes.

B. Public Health and Safety

The simplest place to start is with health and safety regulations. Ifread cavalierly, without sensitivity to the distinctions courts drew be-tween the police and eminent-domain powers, many of these opinionssound like modern regulatory-takings opinions. In one case, for in-stance, the Massachusetts Supreme Court rejected a takings challengeto a swamp-control law because "[p] olice regulations ... are not void,although they may in some measure interfere with private rights with-out providing for compensation."' 1 5

The more theoretical and discursive opinions, however, make itclear beyond cavil that the very principles that justified the power toregulate property also limited that power. New York judges startedwriting comprehensive opinions earlier than their brethren in otherstates. They explained the limits of the police power in the 1826 and1827 opinions Brick Presbyterian Church and Coates.'1 6 An 1823 NewYork City bylaw had barred people from burying the dead in any partof a designated section of the city.' 17 In separate suits, the Brick Pres-byterian Church and the Trinity Church argued that the bylaw wasinvalid because it deprived them of the right to use their plots as cem-eteries.1 18 New York had not yet ratified a takings clause as of 1826,but the Trinity Church and its employees still had a recognized tak-ings claim, because the 1816 decision Gardner v. Village of Newburghhad announced that New York legislative enactments were limited bytakings principles articulated in the Fifth Amendment and by generalprinciples of equity.' 19 Separately, the church and its employeesbrought a Contracts Clause claim on the same "takings" theory. 120

115 Baker v. City of Boston, 29 Mass. (12 Pick.) 184, 194 (1831).116 Coates v. City of New York, 7 Cow. 585 (N.Y. Sup. Ct. 1827); Brick Presbyterian

Church v. City of New York, 5 Cow. 538 (N.Y. Sup. Ct. 1826).117 Coates, 7 Cow. at 585-86.118 Id. at 604; Brick Presbyterian, 5 Cow. at 539-40.

119 2Johns. Ch. 162, 166-68 (N.Y. Ch. 1816).120 See Coates, 7 Cow. at 606.

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The legal issues raised in the two proceedings centered onwhether the bylaw constituted a valid "regulation" of burials. 21 Ac-cording to the law of nature, property may not be used in a mannerthat threatens others' rights to health or safety. Property rights securea range of useful goods, but self-preservation takes precedence overthe acquisition of property. Every owner benefits equally from amoral command barring all her neighbors from using property to in-flict serious health or safety risks on their neighbors. The police pow-ers include the power to write specific regulations to implement thisgeneral limitation on property rights.

These principles explain how the Coates court understood prop-erty and the power to regulate it. Because the city had good groundsfor believing the cemeteries constituted a public-health nuisance,"[n]o property has, in this instance, been entered upon or taken."'122

In this sense, the law was not a valid police regulation because it ap-plied the "power so to order the use of private property in the city, asto prevent its proving pernicious to the citizens generally." 123 Thechurches suffered no "taking" in the natural-right sense because thecemetery law stopped them from doing something they had no natu-ral right to do. In the court's view, "[n]one are benefitted by the de-struction, or rather the suspension of the rights in question, in anyother way than citizens always are, when one of their number is forbid-den to continue a nuisance." 124

The New York Supreme Court applied what one would now call aweak form of intermediate scrutiny of the city's public-health justifica-tion, concluding that the cemeteries posed a real threat to the publichealth. Without such a connection, the New York bylaw would nothave secured the rights of all to their health, but would have insteadtransferred veto rights to city residents who did not want to live nextto cemeteries because they are unsightly or morbid. 125 As moderntakings challenges sometimes acknowledge, this line in principle isnot always easy to draw in practice. 12 6 In the 1820s, it was difficult todetermine whether the cemeteries posed a real threat to public

121 See id. at 606-07; Brick Presbyterian, 5 Cow. at 542.122 Coates, 7 Cow. at 606.123 See id. at 604; see also Kincaid's Appeal, 66 Pa. 411, 423 (1870) ("Though at the time

[property] may be remote and inoffensive, the purchaser is bound to know at his peril thatit may become otherwise, by the residence of many people in its vicinity, and that it mustyield to laws for the suppression of nuisances.").

124 Coates, 7 Cow. at 606.125 See Barnes v. Hathorn, 54 Me. 124, 124, 126 (1866) (stating that a tomb erected

upon one's own land is not necessarily a nuisance "but may become so from location orsome extraneous fact").

126 See, e.g., Rose Acre Farms, Inc. v. United States, 53 Fed. Cl. 504, 518-19 (2002)(ordering compensation for a government-ordered seizure of eggs because the govern-ment had not made enough of a showing that the eggs were infected with salmonella).

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health. Furthermore, assuming, as people of that era did, that ceme-teries breed disease, the aldermen had to draw a line saying whenresidential development had crept close enough to the cemeteries totrigger that threat. The cemeteries were not dangerous in the early1700s, when the churches received their grants, because at that timethe cemeteries were outside the inhabited section of the city.1 27 (Thistime lag also raises conceptually difficult "coming to the nuisance"problems, which will be discussed in detail below in connection withthe 1915 decision Hadacheck v. Sebastian.)' 2

3 Judges knew all aboutthese uncertainties, because they would have had to confront themdirectly if the city had not enacted a bylaw and local residents hadinstead tried to abate the cemetery as a public nuisance.

Even with these uncertainties, the New York Supreme Court up-held the law because "the state of things [was] such as to render theact complained of a nuisance upon actual experiment" and ripe to beabated as "evil[ I already existing."' 29 Elsewhere in the opinion, thecourt explained that "some exigency should, in the nature of things,always exist, and in legal presumption does exist, to warrant the pas-sage of a positive law."' 30 But when the court affirmed that the ceme-teries posed an "actual" nuisance and an "evil [ ] already existing," itconducted enough judicial review to satisfy itself that the city had gen-uine cause for worrying that the cemeteries posed a public-healthrisk.13 1

Because courts were obliged to uphold state laws as "regulations"whenever legislatures could demonstrate a "real" or "actual" nuisance,in practice legislatures enjoyed the benefit of the doubt. But in thefew cases when legislatures passed laws that could not credibly becalled "health and safety" regulations, courts made good on Coates'swarning that "an unwarrantable interference with private property isunconstitutional and void."' 32 The New York Court of Appeals' 1885case In rejacobs provides one example. 133 Jacobs was arrested for roll-ing cigars in the apartment in which he and his family resided.' 34 He

127 See Brick Presbyterian Church v. City of New York, 5 Cow. 538, 542 (N.Y. Sup. Ct.

1826).128 See infra Part III.B.129 See Coates, 7 Cow. at 605.130 See id. at 607.

131 See id. at 604-05; Brick Presbyterian, 5 Cow. at 542; see also Ex parte Fiske, 72 Cal. 125

(1887); Baumgartner v. Hasty, 100 Ind. 575 (1884); Respublica v. Duquet, 2 Yeates 493, 501(Pa. 1799) (upholding fire-control laws). But see Green v. Mayor of Savannah, 6 Ga. 1, 12(1849) (upholding regulation barring growing of rice within Savannah's city limits becausethe Savannah City Council's judgment that there was a nuisance was "conclusive evidenceof that fact").

132 7 Cow. at 606.133 98 N.Y. 98 (1885).

134 Id. at 103.

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had violated a state law that made it a misdemeanor to make cigars ina residential apartment if the apartment building was situated in a citywith more than 500,000 inhabitants and if more than three familiesrented in it. 135 In effect, the law singled out cigar-making tenementrenters in Brooklyn and New York City but nowhere else in thestate. 136

In the Court of Appeals' view, this law deprived Jacobs of a usethat was presumptively within his natural property rights over theapartment: "He may choose to do his work where he can have thesupervision of his family and their help, and such choice is deniedhim. He may choose to work for himself rather than for a taskmaster,and he is left without freedom of choice." "13 7 Because property's "ca-pability for enjoyment and adaptability to some use are essential char-acteristics and attributes without which property cannot beconceived," the court reasoned, "any law which destroys it or its value,or takes away any of its essential attributes, deprives the owner of hisproperty."'138 The right to use the apartment was "property" as muchas the apartment itself. This showing gave Jacobs a threshold claim.139

The court considered Jacobs' arguments primarily under dueprocess principles, but it also assumed that the due process questionfollowed takings principles. The court thought the state's due processclause "would be of little worth, if the legislature could, without com-pensation, destroy property or its value, deprive the owner of its use,deny him the right to live in his own house, or to work at any lawfultrade therein.""14

1 Citing an early and seminal U.S. Supreme Courttakings case, the court also warned that "[t] here may be such seriousinterruption to the common and necessary use of property as will beequivalent to a taking within the meaning of the Constitution." 14 1 Ineither case, the key question was whether the cigar-rolling law was abona fide police regulation. Applying intermediate-scrutiny princi-ples, the court insisted that the law bear "some relation" to healthbefore determining "whether it really relates to and is convenient andappropriate to promote the public health."'142 If the law did promotethe public health, "property m[ight] be taken or destroyed withoutcompensation, and without what is commonly called due process oflaw."1 43 Otherwise, "'[t]he law will not allow the rights of property to

135 Id. at 103-04.1"36 Id. at 104.1'37 Id.

138 Id. at 105.39 Id. at 105-06.

140 Id. at 105.141 Id. at 106 (quoting Pumpelly v. Green Bay Co., 80 U.S. 166, 179 (1871)).142 Id. at 110.

14"3 Id. at 108.

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be invaded under the guise of a police regulation for the promotionof health.' "144

The court concluded that it was just too implausible to say thatthe law promoted the public health. 145 First, there was not substantialevidence that cigar making threatened the Jacobs' health or thehealth of their neighbors. 146 The court took judicial notice that to-bacco had been used for centuries without proof that its manufacturewas dangerous, and the law under review provided no evidence tochange the court's mind. 147 Second, even if there had been evidenceof a health risk, the law did not directly control the supposed healthproblem, and it did not apply equally to all the people supposedlycreating a health problem. Otherwise, why did the law single out ci-gar makers in Brooklyn and New York City, but not in the rest of thestate? And even in Brooklyn and New York City, why did the law tar-get small apartment-based cigar-making businesses while exemptinghome-based cigar-making businesses and cigar factories?"'4 On thesegrounds, the court pronounced the law unconstitutional and void. 149

C. The Public Morals and Order

Courts applied the same basic approach to takings challengesagainst prohibition laws, though they disagreed more than in public-health and public-safety challenges about the results. The prohibitioncases are instructive because they show how courts applied takings andregulation principles when property rights conflicted with the publicmorals.

A few courts held that their state legislatures inflicted takingswhen they prohibited the sale of alcohol. The most comprehensiveopinion came from a New York appellate court in the 1855 decisionPeople v. Toynbee.15°1 As Judge Brown framed the issue, a newly passedprohibition law might be "one of mere regulation-to prescribe bywhom and to whom and at what places liquors in certain quantitiesmay be sold."151 On the other hand, "if it aims at prohibition-prohi-bition of sales ... ; if it provides for the seizure, forfeiture and destruc-tion of an article or thing, the product of human industry, hithertoinvested with the attributes of property," the court would have to con-

144 Id. at 109 (quoting Austin v. Murray, 33 Mass. (16 Pick.) 121, 126 (1834), and citingSlaughter-House Cases, 83 U.S. (16 Wall.) 36, 87 (1872) (Field, J., dissenting), and Coe v.Schultz, 47 Barb. 64, 69 (N.Y. Gen. Term 1866)).

145 See id. at 113-14.146 Id.

147 See id. at 113.148 See id. at 104, 113-14.149 Id. at 115.150 20 Barb. 168 (N.Y. Gen. Term 1855).151 Id. at 186.

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sider the law's constitutionality under takings and due process princi-ples. 1 52 "That which cannot be used, enjoyed or sold, is not property,"Judge Brown explained, "and to take away all or any of these inci-dents, is in effect to deprive the owner of his right of property.1 53

In Judge Brown's mind, the issue was clear. Fermented alcohol,"[i]n every sense of the term ... [,] is property" because it "has beenseparated from the common stock of nature for private use," "is re-garded as an article of diet" and, "by all, as one of trade," and "isbought and sold, lost and acquired, like other property.'" 1 54 Further-more, "[t]he taste for intoxicating drinks is thought to be an instinctof our nature-an operation of the principle of organized life, andnot an artificial appetite or desire peculiar to races or tribes."' 55

Judge Brown doubted public-nuisance principles could enjoinmoderate drinking. "He who knows how to enjoy [spirits] with reasonand moderation, or has the moral courage and self-denial to let themalone, may consider himself free from annoyance and danger." 156 Heacknowledged that spirits might be "converted to base uses-useswhich produce intemperance, pauperism, and crime, and . . .moraldegradation, and grief and anguish unspeakable."1 57 But whereas nui-sance principles could reach "the places where [spirits] are thus usedand those concerned in prostituting them to such uses .... intoxicat-ing liquors cannot be deprived of the defenses with which the consti-tution surrounds the property of the citizen."'' 58 Judge Brownanticipated Richard Epstein's criticisms of prohibition laws and of theU.S. Supreme Court's decision upholding such laws in Mugler v. Kan-sas.159 Even accepting that "disease, poverty, and crime [are] held tobe the inevitable and injurious consequences of alcoholism," Epsteinwarns that these general social problems do not establish "whetherthis public nuisance was properly attributable to these defendants. 1 60

More courts, by contrast, were inclined to presume that prohibi-tion prevented alcoholism and its concomitant social problems. InSanto v. State, for example, the Iowa Supreme Court took a differentview of the causation and public-nuisance problems because the courtsubscribed to a different understanding about what was "natural" for

152 See id. at 186-87.153 Id. at 196. Again, like the Court of Appeals in In reJacobs, Judge Brown spoke

primarily in terms of due process, but treated that inquiry interchangeably with the takingsinquiry. See supra note 107 and accompanying text.154 Taynbee, 20 Barb. at 192-93.155 Id. at 191.156 Id. at 201.157 Id. (internal quotation marks omitted).158 Id.

159 123 U.S. 623 (1887).160 EPSTEIN, TAKINGS, supra note 32, at 130.

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man. 161 The court explained that no matter "how extensive and howdifficult the range of argument through which the question carriesus," the law has to take cognizance of the fact that man is a "politicalbeing."162

If one conceives of man as a "political being," the state's publicinterests take on a different cast. The state is interested not only inpreventing problems like alcoholism, crime, and disease but also inforestalling the kinds of public opinions-the "social norms"163-thatgenerate these problems. To say man is political is to say he sub-scribes to opinions about the good life and is susceptible to publicopinions explaining what the good life is. Thus, even if a particularliquor seller did not cause a particular crime or alcoholism, he stillmight contribute to a moral climate in which his neighbors would befar more likely to fall prey to vices.

From this perspective, the state's main concern is preserving apublic opinion that reduces alcoholism, crime, and disease. Each citi-zen holds a corporate interest in this opinion, which reinforces in himthe desire not to abuse alcohol or engage in other activities that followsuch abuse. To be sure, it is extremely hard to measure in any mathe-matical way how public opinion shapes human behavior, but that isnot to say that opinion has no influence at all. Thus, courts were will-ing to presume, as the Iowa Supreme Court did in Santo, that

[t]here is no statistical or economical proposition better estab-lished, nor one to which a more general assent is given by readingand intelligent minds, than this, that the use of intoxicating liquorsas a drink, is the cause of more want, pauperism, suffering, crime,and public expense, than any other cause-and perhaps it shouldbe said, than ALL other causes combined.' 64

On the same basis, the Illinois Supreme Court rejected the argumentthat that the "natural and constitutional right" to sell liquor "can notbe invaded by declaring it to be an offense" because the "sale for useas a common beverage and tippling, is hurtful and injurious to thepublic morals, good order and well-being of society."'16 5

There was also probably another, subtler factor explaining whycourts gave states the benefit of the doubt in prohibition cases: a "civic

161 See Santo v. State, 2 Iowa 165 (1855).162 See id. at 189-90.163 See, e.g., Symposium, Norms, Law, and Order in the City, 34 LAw & Soc'Y REV. 129

(2000); Symposium, Social Norms, Social Meaning, and the Economic Analysis of Law, 27 J.LEGAL STUD. 537 (1998).

164 2 Iowa at 190.

165 Goddard v. President of Jacksonville, 15 Il. 588, 589, 594 (1854); see Fisher v. Mc-

Girr, 67 Mass. (1 Gray) 1 (1854); People v. Hawley, 3 Mich. 330, 333 (1854) ("The govern-ment may, by general regulations, interdict such uses of property as would abate nuisances,and become dangerous to the lives, or health and peace, or comfort of the citizens.")(citation omitted).

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republican" concern in public self-governance. The Iowa SupremeCourt touched on this concern in Santo, after it had already disposedof the owner's takings challenge. In a separate section of the opinion,the court explained, "not only does our government peculiarly standupon public sentiment, but it is also well understood that a law of thisnature especially requires the aid of the public moral sense, as well asits legal authority for its enforcement."' 16

1 In other words, as long asthe public was trying conscientiously to control a serious social prob-lem fostered by a "vice" activity, judicial review should allow for politi-cal trial and error. Even though overzealous legislation mightoccasionally invade natural rights, the political process would proba-bly strike a fair compromise sooner or later. The regulations that fol-lowed from that compromise would be better obeyed and morepopular if they were the product of a long public debate and a trialrun. Such debate, trial, and error might teach the public to be morerealistic as it learned how to control vice most realistically andeffectively.

As these two cases illustrate, sometimes natural-law reasoning maycause confusion. The word "natural" can be used in many differentand sometimes conflicting senses. In Toynbee, for example, JudgeBrown reasoned that alcohol was "natural" because it was used nearlyuniversally. 167 One presumes he was not familiar with the practices ofMuslims or many Protestant denominations. Judge Brown was alsotoo quick to draw an "ought" from an "is," to conclude that alcoholuse was good because it was popular. Still, he had a point, even if heneeded to explain more fully why alcohol may not offend naturalright if consumed temperately. The Santo court, by contrast, took itsbearings about what was "naturally" right from the fact that man isshaped by society and depends on salutary community opinion for thefree exercise of some of his rights. The Santo court begged some diffi-cult questions about whether the state could have protected opinionwithout banning alcohol entirely, but it still made some sound obser-vations about public-morals regulations.

Still, prohibition laws presented hard cases. Both sides agreedthat the state had some role to play in controlling activities that gener-ated public disturbances. Thus, even if prohibition laws presentedborderline cases, most other liquor-control laws would not. More im-portantly, both sides agreed that, at least in principle, liquor laws didnot get off scot free from "takings" challenges simply because theywere "regulations." Although courts disagreed about the precise pub-lic good that public-nuisance controls meant to protect, or how toconduct "means" scrutiny of those controls, all agreed that the state

166 Santo, 2 Iowa at 208-09.167 See People v. Toynbee, 20 Barb. 168, 191 (N.Y. Gen. Term. 1855).

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needed to make some showing that it was trying to protect the publicorder before the law would fall out of the "taking" category into the"regulation" category. Thus, modern commentators misread thesecases and Mugler v. Kansas, in which the U.S. Supreme Court upheldKansas's prohibition law, 168 when they understand the cases to standfor the proposition that regulations never trigger just-compensationrequirements.1

69

D. The Regulation of Private Property: The Equal Rights of All,or Securing an Average Reciprocity of Advantage

Separately, property regulations could also order how individualsused private property next to one another. These regulations fell intotwo main classes and a tiny third class. One class consisted of nui-sance controls. A second consisted of laws that forcibly rearrangedlegitimate, non-noxious property uses in ways that enabled the ownersto enjoy their properties more than they could have without legal co-ercion. The minor exception regulated how owners behaved towardone another in the rare cases when necessities suspended owners'property rights.

1. Abating Private Nuisances

In property-on-property conflicts, the state could regulate privateproperty for the common good. That good in turn consisted of own-ers' freedom of action over their own property. When more pressingmoral goods like the public health, safety, and morals were not at is-sue, the next object of the common good was to protect each owner'sequal opportunity to put her own land or other property to its pre-ferred use. Since all people need, use, and benefit from the free exer-cise of property rights, it belongs to all equally. No one has aprincipled basis for claiming a wider share of freedom to use his ownexternal possessions than does anyone else. As Madison defined prop-erty, "it embraces every thing to which a man may attach a value andhave a right; and which leaves to every one else the like advantage."'17

1

168 123 U.S. 623, 674 (1887).169 See, e.g., Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1040 (1992) (Blackmun, J.,

dissenting) (citing Mugler as an example of a case in which "[t] he Court ... has upheldregulations imposed to arrest a significant threat to the common welfare, whatever theireconomic effect on the owner"); Treanor, supra note 41, at 797 (citing Mugleras the lead-ing case in a train of cases in which "police power regulations were not compensabletakings").

170 14 T14E PAPERS OF JAMES MADISON, supra note 75. For contemporary discussions ofthe moral foundations of property, see Richard A. Epstein, Pennsylvania Coal v. Mahon:"The Erratic TakingsJurisprudence ofJustice Holmes, 86 GEO. L.J. 875, 876-82 (1998) [hereinaf-ter Epstein, Erratic Holmes]; Adam Mossoff, Locke's Labor Lost, 9 U. CHn. L. SCH. ROUND-rABLE

155(2002).

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This understanding created two separate types of property-on-property regulations. One set defined use rights and their protected"innocent" uses of property from "noxious" uses of property. Someuses of property are per se "noxious" because they are illegitimate-for instance, because they tend to undermine the public morals.Other uses, while legitimate and productive, are still "noxious" be-cause they restrain neighbors' equal freedom to use their own proper-ties. Such uses violate both of the limitations Kent placed onproperty, the duty to respect "the general interest of the community"and the duty "so to use [one's] property as not to injure [one's]neighbours." 171

The law of nature does not prescribe any set formula for measur-ing these concepts of "equal use rights" and "injury." Many differentpositive-law tools may execute the principle that owners should sacri-fice the right to veto how their neighbors use their property in ex-change for protection from interference with the use of their ownproperty. Pollution very strongly indicates that a particular land userestrains equal freedom of action and productivity. In real-life prac-tice, most modern zoning schemes presume that heavy-industrial landuses are the most noxious to competing forms of property, residentialuses least so, with light-industrial and commercial uses somewhere inbetween. 172 Pollution ranked low in a measure often seen in nine-teenth-century nuisance cases: the extent to which different uses con-sume a city's quiet, clean air and clean water. 7 3 Pollution also comesout as noxious under what is perhaps the clearest analytical tool, thephysical-invasion test in trespass and nuisance law. As Epstein has ex-plained, nuisance principles have fuzzy edges because one canstrengthen or relax the invasion test depending on whether the per-son who suffers pollution receives reciprocal permission to pollute inother ways. 174 That said, the physical-invasion test is often a usefullegal proxy for the moral concept of free action.

In any case, under natural-right theory, when such noxious usesmake it impossible for neighbors to dedicate their own properties to

171 2 KENT, supra note 7, at 340; 1 Swlll, supra note 65, at 14 (referring to CHIPMAN,

supra note 65, at 77-79).172 See NOVAK, supra note 45, at 3-6 (quoting Chicago's 1837 legislative charter, which

authorized the city to control pollution such as slaughterhouses, wild animals, tanneries,and other activities threatening "the health, comfort and convenience of the inhabitants ofsaid city"). Compare, e.g., ST. Louis Mo., REV. CODE tit. 26, §§ 26.20-36 (1994) (givingresidential uses top priority), with id. §§ 26.40 to -.48 (giving commercial uses next prior-ity), and id. § 26.56 (giving industrial uses low priority).

173 See, e.g., Galbraith v. Oliver, 3 Pittsb. Rep. 78, 78-79 (Pa.C.P. 1867).174 See, e.g., EPSTEIN, TAKINGS, supra note 32, at 112-21, 118 ("[T]he central function of

a system of private property is to establish the neutral baseline .... The function of the adcoelum rule is to endow boundary lines with legal significance.") (footnote omitted); RICH-ARD A. EPSTEIN, ToRTs §§ 14.3-.4 (1999).

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quiet uses, the state may "regulate" the noxious uses on the sameground as the cemeteries discussed in Coates.175 As that court held,"[A]n absolute ownership in property... is purchased and holdensubject to the restriction, that it shall be so exercised as not to injureothers," and states hold "power so to order the use of private property

... as to prevent its proving pernicious to the citizens generally."1 7 6

2. Securing a Common Benefit to All Affected Owners

Once the law had protected innocent property uses from noxioususes, it could reorder the innocent uses to enlarge all owners' freeaction. If a group of neighbors put their properties to fairly homoge-neous uses, the law could force them to cooperate in a way that gavethem each more power to enjoy his own. Such a "regulation" followedthe principles of a partnership among equals. If the law restrainedowners' rights, it had to enlarge the rights retained to make them asor more valuable than the rights lost.

One of the earliest and simplest illustrations of this principlecame in a challenge to a traffic regulation, in Vanderbilt v. Adams, an1827 decision by the New York Supreme Court.177 New York City hadcited Vanderbilt for disobeying the orders of a harbor master in NewYork Harbor. 178 Under city ordinances regulating the harbor, themaster had the power to make space for laden boats to unload theircargos by ordering docked boats to move over and make room. 179

Vanderbilt refused to obey these orders because he had docked hisboat at a privately-owned dock that he leased, and he did not wish tomove his boat to make room for any other boat. 180 When the cityfined him, he brought a mixed takings and Contracts Clause chal-lenge against the ordinances, on the ground that the city took his use,enjoyment, and property rights in the dock.18' The court rejected thisconstitutional challenge because the ordinance was "not, in the legiti-mate sense of the term, a violation of any right," but rather an exer-cise of the power to enforce "a necessary police regulation. '" 18 2

However, the court emphasized that "[t] he line between what wouldbe a clear invasion of right on the one hand, and regulations not les-

175 See supra notes 122-31 and accompanying text.

176 See Baker v. City of Boston, 29 Mass. (12 Pick.) 184, 194 (1831); Coates v. City of

New York, 7 Cow. 585, 604, 605 (N.Y. Sup. Ct. 1827).177 7 Cow. 349 (N.Y. Sup. Ct. 1827).178 Id. at 349.

179 Id at 349-50.

180 Id. at 350.

181 See id. at 350.

182 Id. at 351.

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sening the value of the right, and calculated for the benefit of all,must be distinctly marked."183

Here, the court applied the equal-partnership or equal-advantageprinciple Wilson had invoked to distinguish "regulations" of rightsfrom "invasions" of rights. 184 If one knew that the primary object forall dock and boat owners on the harbor was to enter into exchanges tounload boats, and if one also knew that "the harbor is crowded withvessels arriving daily from various parts," the ordinances had the prac-tical effect of enlarging the scope and value of all dock and boat own-ers' freedom. 185 The ordinances did not take "property" because theydid "not proceed to the length of [impairing] any right in the propersense of that term."186 In the court's view, "[e]very public regulationin a city may, and does, in some sense, limit and restrict the absoluteright that existed previously. But this is not considered an injury. Sofar from it, the individual, as well as others, is supposed to bebenefited." 187

Sometimes nuisance control and equal advantage combined toproduce more supple regulations, as shown in Inhabitants of Palmyra v.Morton.'18 The town of Palmyra chose to build footpaths next tohomes not by public construction but by requiring homeowners tocurb and pave paths in front of their homes. 8 9 The Missouri Su-preme Court rejected a takings challenge, on the ground that the lawwas a valid police regulation.1t '° The court held:

The right of a municipal corporation to require the owner to pavethe side-walk in front of his property may be derived from its duty toprotect the public health and to prevent nuisances, and is a merepolice regulation. It is the exertion of the same power that prohib-its persons from throwing filth into the streets, or from obstructingthe side-walks; that regulates awnings... and that requires the pave-ments in front of each house to be kept clear of ice and snow. 191

It may seem strange that the court chose to defend the law on theground that an unpaved walkway could be a nuisance. Unkept side-walks probably did not threaten to evict residents from their homes as

183 Id.184 See supra note 92 and accompanying text.185 See Vanderbilt, 7 Cow. at 351.186 Id.187 Id. at 351-52. The court also took special note that Vanderbilt conceded the har-

bor master would have had legal power to order him to take on a foreign boat if he werenot docking his own boat at his harbor. See id. at 351. In other words, Vanderbilt had noprincipled basis on which to claim he placed great value in his right to exclude all otherboats from his dock.

188 25 Mo. 593 (1857).189 Id. at 594.190 Id. at 595-96.

191 Id. at 596.

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industrial pollution did. Still, unpaved sidewalks imposed some dis-turbance on neighbors, and everyone benefited from having easierand cleaner access throughout town. The rules of nuisance were sup-ple enough to lower the level of "noxiousness" if all owners benefitedfrom a duty to maintain the sidewalks on their properties. The townof Palmyra, then, could issue a regulation to order everyone's prop-erty rights and duties on the same terms as the private law of nuisanceand, ultimately, the principle of equal property rights.

Another street-paving case, Paxson v. Sweet, 192 shows how the sameprinciples applied not only to distinguish regulations from takings,but also to fix just compensation. 193 When a local resident challengeda street-paving law enacted in Trenton, the NewJersey Supreme Courtassumed that the law operated as a taking.194 But the court stillbrushed off the takings challenge, on the ground that the law did nothave to pay Paxson in cash to compensate him justly. Paxson's takingsclaim, the court reasoned, turned

on the adequacy of compensation, which .. .might be proved inways that are abundant. The citizen receives it in part, by its addingto his private property an increase of its intrinsic value either forsale or enjoyment; by the health and comfort of his own household;by his enjoyment of the like foot ways every where else, in which hefreely participates without contributing to their expense .... 195

Taken together, Palmyra and Paxson anticipate what Frank Michelmanand Richard Epstein have described as an "implicit in-kind compensa-tion" justification for a restraint on private property.19 Palmyra ap-plied this justification through the "takings" element, and Paxsonthrough the 'just compensation" element, but to the same effect.

3. Cases of Private Necessity, or Regulating When There Is NoNatural Property Right

One exceptional case illustrates how the law might "regulate" aconflict when neither party owned "property" in the natural-rightsense of the term. In American Print Works v. Lawrence, the New JerseySupreme Court upheld a New York City law that authorized city offi-

192 13 N.J.L. 196 (1832). Paxson seems strange because the court assumed, contrary to

Barron v. City of Baltimore, 32 U.S. 243 (1833), that the Takings Clause in the Federal Consti-tution applied directly to actions by New Jersey, whose constitution did not yet have atakings clause. Paxson, 13 NJ.L. at 197, 199. Still, that incongruity does not affect how thecourt interpreted the Takings Clause.

193 See U.S. CONST. amend. V ("[Nior shall private property be taken for public use,

without just compensation").194 Paxson, 13 N.J.L. at 197, 199.195 Id. at 199.196 See EPSTEIN, TaKINGS, supra note 32, at 195-215; Michelman, supra note 22, at

1225-26.

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cials to blow up private buildings to stop the spread of fire. 197 Thechallenged law codified the common-law trespass defense of necessity.But instead of leaving the necessity determination to the trespasser,the law vested it in the judgment of elected New York officials.198 Thelaw compensated owners for the loss of their buildings but not for theloss of any personal property in those buildings. 199 When a NewJersey printing company sued to recover the cost of expensive printingworks destroyed in a New York City fire, the New Jersey SupremeCourt rejected the company's takings claim on the ground that thelaw regulated a necessity in which property rights were suspended.

The court made clear that the print works' property rights didnot extend to prevent neighbors from destroying printing equipmentif that equipment posed a fire hazard. 2 °11 The court acknowledgedthat eminent domain gave the State of New York the power to takeproperty for public necessities. 2° 1 "But the right to destroy propertyto prevent the spread of a conflagration," the court reasoned, "restsupon other and very different grounds. It appertains to individuals,not to the State .... It is a natural right existing independently of civilgovernment. It is both anterior and superior to the rights derivedfrom the social compact."20 2 Because a fire is an act of God or force,which threatens to destroy all property in its wake, the laws of naturedo not bar owners from taking steps necessary to protect their prop-erty. In such an emergency, the moral duties neighbors usually owe toeach other, like the duty to respect the law against trespass, are sus-pended. As the court explained it, the neighbors stand in the samerelation as do two drowning men who contemplate "the exclusive ap-propriation of a plank in a shipwreck."203

The New York law was a valid regulation because it ordered howthe parties would behave toward one another during the necessity.Because every neighbor to the printing company enjoyed a "right ofdestruction . . . prior to the [law's] enactment[,] . . . [t]he statutecreated no new power. It conferred no new right .... It regulated themode in which a previously existing power should be exercised." 20 4

The statute regulated the law of necessity by transferring "the power

197 21 N.J.L. 248 (1847).198 See id. at 255. American Print Works was litigated in New Jersey, but the fire and

trespass occurred in New York City. See id. at 256.

199 Id.200 See id. at 257-58.201 Id. at 257.202 Id.

203 Id. at 258.204 See id. at 259 (emphasis added).

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of judging of the existence of the necessity" from neighbors' self-serv-ing judgment to public officals' more dispassionate judgment.20 5

American Print Works shows that judges who subscribed to natural-right property theory recognized that this theory could not explainevery situation. Still, it did not seem to bother the New Jersey Su-preme Court that natural-right principles could not mediate the con-flict between two drowning sailors or the conflict between the ownersof two buildings in danger of burning down. Most theories of prop-erty could not mediate either conflict.

At the same time, American Print Works still confirms the nine-teenth-century rule. It highlights the only situation in which a lawcould play favorites between two owners. Modern takings law suggeststhat every regulation pits one form of property against another; thereis no distinction in principle between takings and regulation becauseevery regulation forces the public to favor socially valuable uses overless-valued uses.2 1°6 American Print Works shows that nineteenth-centurycase law followed this approach only in the extremely narrow class ofcases in which it was impossible to say that either owner had "prop-erty" in the contested use. The city official could do what was neces-sary for the public good without triggering takings guarantees becausethe fire suspended the property rights all owners normally enjoyed intheir buildings. Thus, American Print Works confirms, while takingsguarantees protected owners from disproportionate burdens whenthey had rights to the property burdened, the constitutional guaran-tee extended only as far as the property.

4. Invasions of Right

No t many so-called "regulations" failed these tests over the courseof the nineteenth century, but a few did. Dam owners received justcompensation when fish-conservation laws required them to lowertheir dams so salmon, shad, or other fish could swim upstream tosmelt. These laws raised a complication, to be considered in the nextsection, regarding whether the dam owners truly had "private prop-erty" in their riparian rights. But when a dam owner did hold privatewater rights, unencumbered by any navigational servitude or anyother public servitude, courts routinely declared dam laws to be regu-latory takings. The New York Supreme Court of Judicature handed

205 See id. Strange to say, the NewJersey Supreme Court was more solicitous to uphold

the challenged statute than the New York courts were. A decade earlier, the New YorkSupreme Court had ordered compensation for personal property under the same statute,in another suit arising out of the same fire in New York City. See Mayor of N.Y. v. Lord, 17Wend. 285 (N.Y. Sup. Ct. 1837). Still, the New Jersey Supreme Court, and the opinion ofdissenting Justice Bronson in Lord, are more consistent with general principles of naturalproperty rights and regulation.206 See infra Part III.F.

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down the earliest and most influential of these decisions in the 1819opinion People v. Platt.20

7 For Chief Judge Spencer, the hard questionwas whether New York enjoyed any navigational servitude over Plattand his successors' river property. Once he had confirmed that Platt'sland grant was not affected with any public interest, the judge quicklyconcluded that Platt "gained a complete right to the exclusive enjoy-ment of the river," and he had a threshold Contracts Clause claim ona takings theory.2°8

Chief Judge Spencer framed the question as whether the NewYork legislature "intended to invade private rights" by depriving pri-vate riparians of their exclusive water and fishing rights. 20 9 Becausehe concluded that the legislature had not intended what he thoughtto be an unconstitutional result, he enjoined the law from applying toPlatt and his successors. 210 Platt was an early and clear "regulatorytakings" victory for a property owner. By mid-century, litigants andcourts throughout the several states understood Platt as a precedentfor the principle that a legislature unconstitutionally invaded privaterights if a state law arbitrarily restrained the free use of privateproperty.2 1'

The Virginia Supreme Court applied the same principles in the1828 decision Crenshaw v. Slate River Co. According to Judge Green,

the right of fishing in fresh water streams, or within the bounds ofany Patent, is ... confined to the riparian owners; each of whom isentitled to the natural run of fish of passage upwards, as he is to thenatural flow of the water downwards .... Whilst the Legislature,therefore, might properly yield the public right of navigation to in-dividuals for the sake of securing the public convenience of mills,they could not justly sacrifice to this object, the individual rights inrespect to the natural run of fish.

2 1 2

The owners had a right to use the river for fishing, and the fish-damlaw restrained their rights without any corresponding benefit. Such alaw, Judge Green concluded, acts to "invade private rights" because itacts to "deprive a citizen of ... property already legally acquired, with-out a fair compensation. ' 2 While Plait applied natural-law principlesthrough the Contracts Clause, Crenshaw and other courts relied explic-itly on general natural-law reasoning; 2 14 the North Carolina Supreme

207 17 Johns. 195 (N.Y. Sup. Ct. 1819).208 Id. at 212-16.209 Id. at 214.210 Id. at 214-16.211 See, e.g., Cox v. State, 3 Blackf. 193, 198 (Ind. 1833); Commonwealth v. Alger, 61

Mass. (7 Cush.) 53, 58 (1853); Eaton v. Boston, Concord, & Montreal R.R., 51 N.H. 504,520-22 (1872); Woolever v. Stewart, 36 Ohio St. 146, 151 (1880)

212 27 Va. (6 Rand.) 245, 270 (1828).213 Id. at 276.214 See id. at 264-65 (Carr, J.).

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Court held natural-law takings limitations implied within the state'sconstitution; 21 5 and other courts invoked the same principles understate constitutional clauses protecting property.2 16

Woodruff v. Neal applied the same takings principles to grazinglaws.2 1

7 After a state expropriated an easement for a railroad or high-way, it often forced the landowner to relinquish his herbage rights topeople who wanted to graze their livestock for free.218 Like the firelaw challenged in American Print Works,2 19 these laws stripped ownersof a right to prevent physical invasions of their property. Unlike thatfire law, the grazing laws invaded property rights still in force. In Con-necticut, the Connecticut Supreme Court emphasized, the fee ownerretained "all rights of property in the land not incompatible with thepublic enjoyment of the right of way," including "a right to every useand profit which can be derived from it consistent with the ease-ment."220 Thus, the owner lost "private property" when he lost hisherbage rights and the right to exclude other grazers. In the court'sview, to grant herbage rights to other grazers, "no compensation hav-ing been in any manner provided for the owner of the land uponwhich it is to be exercised, is beyond the constitutional power of thelegislature. '" 221 On that basis, the court concluded that the law ef-fected a taking. 222

E. The Protection of Public Property Interests: Public Propertyand Private Property Affected with a Public Interest

Finally, the most complicated series of legal tests evolved to dis-pose of takings challenges against two classes of public-nuisance regu-lations: laws protecting public servitudes, and laws protecting publiccommons. These challenges raised two issues that usually did not pre-sent themselves in the other lines of cases: whether the owner reallyowned the interest he was defending as "private property"; andwhether the state was regulating to protect a genuine "public interest"in a public commons or a public servitude. Notwithstanding thesehurdles, courts approached public-nuisance cases in the same way asprivate property-on-property conflicts. Most of the cases focused onwhether the law validly regulated private property by stopping theowner from using his own in a way that threatened a public commons

215 See State v. Glen, 52 N.C. (7 Jones) 321, 330-31 (1859).216 See Woolever, 36 Ohio St. at 151; Commonwealth v. Pa. Canal Co., 66 Pa. 41, 50-53,

55 (1870).217 28 Conn. 165 (1859).218 See id.219 See discussion supra Part II.D.3.220 Woodruff 28 Conn. at 167.221 Id. at 169.

222 See id. at 169-70.

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or servitude. In at least one case, the regulation tracked the "equaladvantage" cases analyzed in Part II.D.2.

1. Public and Private Ownership

The public-nuisance cases differed from the other lines of casesprimarily because they raised serious threshold questions aboutwhether there was a bona fide "public interest" to protect. Thesequestions created hurdles for both the state and the private owner. Ifthe state had good reason to hold property, either by holding titleitself in a public commons or by claiming a servitude on a privateowner's property, it could invoke nuisance principles to regulateagainst interferences with that public domain. But the state needed areal policy interest in protecting a public commons or servitude. Onthe other hand, if the property at issue was properly held as a publiccommons, and the owner's takings claim focused on an interest in thecommons, the owner might not have any "private property" withwhich to mount a takings claim.

These lines between public and private property present some ofthe most treacherous problems in property law. The account that fol-lows in this section is provisional, because I am not aware of any mod-ern scholar who has developed a full justification for public-commonsand public-servitude rules explicitly in natural-law or natural-rightterms. The cases studied here do not provide any such justification,either. They tended to focus on fact-bound questions like whether aparticular river was navigable. 223 Still, it would come as no surprise ifa natural-right justification for making a commons out of a resourcefollowed utilitarian justifications by focusing on the resource's physi-cal characteristics and likely uses. 224 If natural property rights enlargeindividuals' free use of their own, it makes sense to place certaingoods in common if all may use them without diminishing or deterio-rating the goods. There is no need to use private-property rights toenlarge people's freedom if all may use a good freely without destroy-ing it. Land and other similar resources tend not to meet this crite-rion. Land is easy to subdivide, it can be put to many different andconflicting uses, and many of those uses require substantial invest-

223 For an in-depth analysis of nineteenth-century public-servitude law, see Daniel J.Hulsebosch, Writs to Rights: 'Navigability' and the Transformation of the Common Law in theNineteenth Centuiry, 23 CARDOZO L. REv. 1049 (2002).

224 See Richard A. Epstein, On the Optimal Mix of Private and Common Property, 11 Soc.PHIL. & POLY. 17 (1994). For a useful introduction into public-commons issues, see ROB-ERT C. ELLICKSON ET AL., PERSPECrIVES ON PROPERTY LAw 119-59 (3d ed. 2002) (excerptingscholarship from four different authors). For a more skeptical view of common-propertyrules, see Joseph L. Sax, Takings, Private Property and Public Rights, 81 YALE LJ. 149 (1971)[hereinafter Sax, Takings]; Joseph L. Sax, The Public Trust Doctrine in Natural Resource Law:Effective Judicial Intervention, 68 MICH. L. REv. 471, 475-76 (1970).

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ment. Water, by contrast, often meets this criterion. Water is difficultto subdivide, it is useful for only a narrow and homogeneous range ofuses, and those uses tend to require little or no investment. At thesame time, land can go into commons if everyone in an area needs itfor light grazing, and water may go into private property if it is badlyneeded for private uses and the demands on public waters are tooheterogeneous. 22 5 In any event, even within a natural-right frame-work, the overarching moral imperative does not shape the choicebetween private and public property as much as the physical and eco-nomic characteristics of different resources and the likely uses ofthose resources.

Even then, after most property has been marked off as public orprivate property, the law still needs doctrines to mark off and connectthe two. This function is served byjuris publici ("affected with a publicinterest")226 doctrines, which define the conditions in which privateproperty may be subject to public servitudes. Such servitudes may en-sure that members of the public can gain access to public commons,such as a public lake enclosed by private property. Or, they can try tocapture the advantages of public property for a few uses while preserv-ing all the advantages of private property for the remaining uses. Forinstance, if the law imposes a navigational servitude on an otherwise-private river, it preserves most of the benefits of holding land in pri-vate while still giving everyone in the community free access to rivernavigation.

These doctrines raise difficult policy issues, but in many cases thebackground doctrinal rules are fairly straightforward. Those rules de-rive from three possible sources: the state's original grant to theowner challenging the state law and any reservations in that grant,state and local legislation allocating property rights, and the back-ground common-law principles. A legislature might want to fine-tunethese private-public boundaries, but no system of legal boundaries isperfect. The reliance interests in stable rules of possession are huge.Eminent-domain rules are constitutional guarantees because legisla-tures occasionally forget about those reliance interests. In most cases,courts are more than competent to interpret land grants, boundarystatutes, and background common law. If these sources of law markoff the boundaries between private and public property tolerably well,it makes sense for courts to maintain and enforce them.

225 See Robert C. Ellickson, Property in Land, 102 YALE L.J. 1315, 1322-44 (1993) (com-paring the merits of individual and collective ownership of land); Carol M. Rose, Energyand Efficiency in the Realignment of Common-Law Water Rights, 19J. LEcAL STUD. 261, 288-94(1990) (showing how common-law water rules have changed depending on whether waterwas consumed as a high-investment private resource or used as a low-investment publicgood).

226 See BLACK'S LAw DICMIONARY 855 (7th ed. 1999).

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This is how state courts saw the problem, as illustrated in Cren-shaw v. Slate River Co., the case involving a challenge to the shad-con-servation law discussed in the previous section. 227 Before the VirginiaSupreme Court could conclude that the shad-conservation law underreview constituted a regulatory taking, it first had to establish that

Crenshaw had "private property" in his riparian rights. Before review-ing the ownership issues, Judge Green explained why he had to con-

duct de novo review of those issues:

The questions, whether the rights of the owners of mills, or of thepublic, for the purposes of navigation, are preferred by Law gener-ally, or in any particular case, are emphatically Judicial in their na-ture, depending on the effect and construction of former Laws;and, if upon a full and careful consideration, we conscientiously dif-fer in opinion in any particular case from the Legislature, we arebound by the highest obligations of duty to ourselves and our coun-try, to pursue our own judgment.228

Because the Slate River was not navigable, Judge Green con-cluded that Crenshaw held his water rights in absolute ownership, andthat he had private property protected by takings guarantees. 229 Be-cause the river was private property, the state could not justify theshad-conservation law as a regulation protecting a public servitude orany other public property interest. The law would stand or fall as aregulation of private property, as analyzed in the previous section, andit fell on that basis. Platt, the parallel New York dam case, and otherdam cases followed the same reasoning.2 3 '

Cox v. State, by contrast, illustrates how the same background pub-lic-ownership principles might nullify the owner's taking claim at thethreshold stage. Indiana prosecuted Cox for obstructing the WhiteRiver with two separate mill dams, in violation of state law.2

1' CitingPlatt, Cox argued that "being the owner of the banks of the river, [he]is by the common law, the owner of the river, and has a right to oc-cupy and use it, in any way or manner he pleases, for his own bene-

227 See supra notes 212-16 and accompanying text.

228 Crenshaw v. Slate River Co., 27 Va. (6 Rand.) 245, 277 (1828).

229 See id. at 272-73.

230 People v. Platt, l7Johns. 195, 209-16 (N.Y. Sup. Ct. 1819); see State v. Glen, 52 N.C.

(7Jones) 321, 334 (1859) (holding that "[r]ights acquired ... by grants from the State...cannot be taken from the owners by the government, except in the exercise of the powerof eminent domain, and then only for public use, with a provision for just compensation");Woolever v. Stewart, 36 Ohio St. 146 (1880) (holding that an act requiring a clam owner toconstruct and maintain a passageway for fish was unconstitutional); Commonwealth v. Pa.Canal Co., 66 Pa. 41, 47 (1870) ("If the state has.., granted a tract of land to an individual... I it cannot, by law, revoke the grant ... ; and even when taken for necessary publicpurposes, must pay the owner a full equivalent.").

231 Cox v. State, 3 Blackf. 193, 194 (Ind. 1833).

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fit."2 32 The court, however, took note that property questionsinvolving the White River were governed not by the common law, butby acts of Congress. These Acts had declared the White River to be acommon interstate highway before Indiana incorporated as a state. 233

Because the Indiana law protected the river's use as a common high-way, consistent with the federal laws controlling the river's ownership,the Court concluded Indiana had not "infringed the rights of eitherher own citizens, or the rights of the citizens of other States."234

2. "Regulation" of Public Nuisances

When an owner proved she owned private property and the stateproved it had public property, the principles considered in the previ-ous sections came into play. If the people vest their equal propertyrights in a commons or public servitude, a neighboring private ownerbecomes subject to a duty not to use his own in a manner that inter-feres with the purposes of the public domain. This duty tracks own-ers' duties not to interfere with their neighbors' health, safety, andproperty rights. In principle, the public-domain limitation mostclosely tracks the public morals limitation. In both, private property isqualified to protect a common good enjoyed corporately by all thecitizens in the community.

However, this rationale also imposes principled limits on what thestate may do to protect public property. The Supreme Court of Mas-sachusetts explained how nuisance principles both justified and lim-ited public-nuisance regulation in the 1808 decision Inhabitants ofStoughton v. Baker,235 which was respectfully cited in Platt and manyother decisions throughout the nineteenth century. 2- 6 Stoughton in-volved a challenge to a fish-conservation law similar to the laws at issuein Platt and Crenshaw.23 7 Unlike Platt and Crenshaw, however, the townheld a valid public interest in the river, because Massachusetts prop-erty law broke with the common law and gave towns the power torequire sufficient passages for fish through all streams, navigable ornon-navigable. 23 8

232 Id. at 198.

2 3 See id. at 194-95.234 Id. at 195-96, 198-99. Along the same lines, see Moor v. Veazie, 32 Me. 343,

356-61 (1850), in which the Supreme Court of Maine rejected a takings challenge to a lawgiving a steamboat owner a patent to introduce the steamboat along a navigable river.Because the river in question was a public river, the challenger had only a commons rightto use the river, which could not satisfy the private-property threshold requirement for atakings claim. See id. at 356.

235 See 4 Mass. (3 Tyng) 522 (1808).236 See, e.g., People v. Platt, 17Johns. 195, 211-13 (N.Y. Sup. Ct. 1819).237 4 Mass. (3 Tyng) at 522-24.238 See id. at 528; see also Platt, 17 Johns. at 212 (distinguishing Stoughton because New

York followed the common law and Massachusetts did not).

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Once Chief Judge Parsons had established that the public had aright of passageway for the fish, he drew upon nuisance principles todelineate the scope of that right. Every dam owner, the court ex-plained, holds property "under the limitation, that a sufficient andreasonable passage way shall be allowed for the fish."2 39 This phrase,"sufficient and reasonable," both justifies and limits the public'spower to regulate:

[If a committee thus appointed should locate and describe a pas-sage way for fish unnecessary and unreasonable, by which the prop-erty of the owner of the mill was injured without any public benefit,we do not admit that he would be without remedy. The ownerholds his privilege subject to the limitation, that a reasonable andsufficient passage way should be allowed for the fish. Beyond thisthe public has no interest, and private right is invaded. 241

The Stoughton court found that the sluice ways in question were rea-sonably necessary. The requirements that the fish need a sufficientsluice, and that the dam be no larger than necessary and reasonable,set principled limitations at both the "ends" and "means" stages ofjudicial review. "[I1t would be an unreasonable construction of thegrant," Chief Judge Parsons warned, "to admit that by it all the peoplewere deprived of a free fishery ... above the dam."2 4' Without suchshowings, the state could cite fish protection to wipe out the owner'sdam even for minor benefits to the fish, and "private right [would be]invaded."

242

Courts applied this level of scrutiny to a wide range of public nui-sances. The Massachusetts Supreme Court applied it in Commonwealthv. Tewksbury to uphold a prosecution against a riparian whose diggingthreatened to undermine an embankment on a public river.24- Onthe same basis, the New York Court of Errors upheld an Albany lawbarring the floating of 120-foot docks on the Hudson River, on thegrounds that such docks inflicted a public nuisance by frustratingnavigation. 244

2 9 Stoughton, 4 Mass. (3 Tyng) at 528.240 Id. at 529.

241 Id. at 528.242 Id. at 529.243 See 52 Mass. (11 Met.) 55, 57 (1846). According to the opinion by Chief Judge

Shaw, "All property is acquired and held under the tacit condition that it shall not be soused as to injure the equal rights of others, or to destroy or greatly impair the public rightsand interests of the community." Id. Therefore, the court continued, "it is competent forthe legislature to interpose, and by positive enactment to prohibit a use of property whichwould be injurious to the public, under particular circumstances, leaving the use of similarproperty unlimited, where the obvious considerations of public good do not require the restraint." Id.(emphasis added).244 See Hart v. Mayor of Albany, 9 Wend. 571, 572, 582-83 (N.Y. 1832) ( Sutherland,

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This scrutiny had enough bite to exclude some public-nuisanceregulations on the ground that they went too far to control too small apublic nuisance. For instance, in State v. Franklin Falls Co., the NewHampshire Supreme Court concluded that a fish-conservation law likethe ones under challenge in Platt and Crenshaw could not be upheld asan exercise of the police power, because the state had not substanti-ated the threat to fishing.2 45 "The restoration to the public of theshad fishery in the lake," the court explained, "has not such a directrelation to the public health as the prohibition of interments withincity limits; nor the same direct relation to the public safety as the pro-hibition of the erection of wooden buildings in the midst of a popu-lous village." 246 The court concluded that "[t]he indirect benefits tothe public health ... do not seem to warrant the legislature in depriv-ing the respondents of valuable rights without compensation. '"2 47

3. Equal-Advantage Principles in Public-Nuisance Regulation

As in the property-on-property cases, public-nuisance regulationcould also be justified under the equal-advantage principle. If thestate wanted to exceed what Stoughton had called abating a "necessary"control of a nuisance in a "reasonable" manner, it could do so, butonly if it compensated the owner for the use rights he lost.

Commonwealth v. Alger illustrates this principle in action. Sepa-rately, Alger is an appropriate case with which to conclude this Part. Itmay be the most comprehensive restatement of natural-right takingstheory of all the cases considered here. At the same time, it is almostcertainly the most misunderstood takings case from the nineteenthcentury. Chief Judge Lemuel Shaw's opinion was cited frequently byleading jurists like Thomas Cooley as a textbook restatement of thescope of the police power.248 But the case is now assumed to stand forthe opposite: It is cited more often than any other nineteenth-centurycase as proof that there was no "limit on the State's power to regulateharmful uses even to the point of destroying all economic value. '2 49

245 See State v. Franklin Falls Co., 49 N.H. 240, 251 (1870).246 Id.

247 Id. The New Hampshire Supreme Court denied the challenge to the law on an-

other ground, but it did so only after it first concluded that the law could not be sustainedas a police regulation. See id. at 251-52.

248 See, e.g., Gilbert v. Showerman, 23 Mich. 448, 454 (1871) (drawing on Commonwealth

v. Alger, 61 Mass. (7 Cush.) 53 (1853), in a private-nuisance case to explain the relationbetween property rights and property regulation).

249 See, e.g., Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1059 (1992) (Blackmun, J.,dissenting); see id. at 1060 (citing Alger, 61 Mass. (7 Cush.) 53 (1853)); Harry N. Scheiber,The Jurisprudence-and Mythology-of Eminent Domain in American Legal History, in LIBERTY,

PROPERTY, AND GOVERNMENT: CONSTITUTIONAL INTERPRETATION BEFORE THE NEW DEAL 217,223 (Ellen Frankel Paul & Howard Dickman eds., 1989); Treanor, supra note 41, at 793-94& n.67. For an earlier treatment of Alger, see LEONARD W. LEVY, THE LAW OF THE COMION-

WEALTH AND CHIEFJUSTICE SHAW 247-54 (Oxford Univ. Press 1987) (1957).

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Alger presented a challenge by a wharf owner to a series of Massa-chusetts laws that redrew the harbor lines for Boston Harbor.250 A1641 Massachusetts colony ordinance had governed the property is-sues prior to the laws under challenge. Under that ordinance, anyonewho owned shoreline next to a body of salt water in Massachusetts alsoowned the flats between the high- and low-water marks, subject to anavigational servitude. 25 1 In the 1830s and 1840s, however, the Massa-chusetts legislature redrew the shoreline boundaries by passing a se-ries of laws establishing property lines in reference to visible objectsringing Boston Harbor. 252 The boundary laws also forbade anyonefrom extending a wharf or any other structure beyond those statuto-rily enacted lines. 253

The parties stipulated at trial that Alger had started constructionof a wharf within his shoreline flats in 1843, four years before the statedrew a boundary line affecting his propertyY54 The 1847 line bifur-cated Alger's construction. The north wall of the wharf fell on thestate's side of the new boundary, while the rest of his construction fellon the side of the shoreline flats still reserved to Alger.255 Rather thanretract the north wall, Alger continued construction and built anothersmall triangular piece of the wharf beyond the new boundary line.25 6

Important to Chief Judge Shaw's opinion, the parties stipulated thatthe state was not regulating to abate an existing public nuisance; Al-ger's wharf inflicted "no injury to navigation. ' 257 Also important, theindictment was unclear on whether Alger was liable only for the smalltriangle built after the 1847 boundary or also for the pre-existingconstruction.

2511

Consistent with the other cases in this section, Chief Judge Shawfirst reviewed de novo whether Alger had private property andwhether the state had a valid public interest in that private property.Reviewing English common law, the 1641 colony ordinance, andother authorities, the judge confirmed that Alger did hold the flatsabove the low-water mark in fee, but that the shoreline flats betweenhigh and low tides were juris publici, subject to Massachusetts's naviga-tional servitude.2 5 1 Alger differs from the other cases discussed in thisPart, however, because it was clear that his post-184 7 construction did

250 Alger, 61 Mass. (7 Cush.) at 64-65.251 Id. at 67-68.252 Id. at 54-55.

253 See id.

254 Id. at 56.255 See id. at 56-57.256 See id.257 Id.

258 See id. at 55-56, 103-04.259 Id. at 65-79.

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not create a real public nuisance. As the state had stipulated at trial,Alger's construction posed "no injury to navigation. '" 26

1 Thus, thestate could not argue that Alger had no "private property" in using thetriangular section of shoreline flats on the ground that the trianglewas presently and actually impeding navigation.

Nevertheless, Chief Judge Shaw upheld the 1847 boundary linebecause, when passed, it worked to the equal advantage of Alger andthe state. The lines between private and public property were fuzzybecause Alger held his flats juris publici. Because the flats belongedprivately to Alger, he had the potential right to build a wharf on them.But because the flats were subject to a navigational servitude, Algerwould always be exposed to the possibility that his wharf might im-pede navigation. The 1847 law stripped Alger of use rights outsidethe new lines to give him more security within them.

ChiefJudge Shaw's opinion followed this logic. On one hand, heread the colony ordinance to give Alger full property rights to use hisflats as he wanted. The object of the ordinance, the court reasoned,

seems to have been, to secure to riparian proprietors in general,without special grant, a property in the land, with full power to erectsuch wharves, embankments and warehouses thereon, as would beusually required for purposes of commerce, subordinate only to areasonable use of the same, by other individual riparian proprietorsand the public. 261

In other words, when Alger acquired private property by his originalgrant, he acquired property not only in the possession of the flats butalso the fight to use the flats to their fullest extent consistent with therights of others. This holding differs drastically from modern law,which recognizes no "property" right in undeveloped use potential. 262

Alger required a long and comprehensive court opinion, by contrast,because Alger's use potential was property, he had a presumptive tak-ings claim, and the state had to compensate him in some other way.

On the other hand, the private property Alger held in that usepotential was subject to some police regulation. "[E]very holder ofproperty, however absolute and unqualified may be his title," ChiefJudge Shaw stressed, "holds it under the implied liability that his useof it may be so regulated, that it shall not be injurious to the equalenjoyment of others having an equal right to the enjoyment of theirproperty, nor injurious to the rights of the community. '" 26 3

If Chief Judge Shaw had conflated the police power with the emi-nent-domain power, he could have dismissed the challenge to the

260 Id. at 56-57.261 Id. at 89.262 See infra Parts IIB, IIE, [V.A.263 61 Mass. (7 Cush.) at 84-85.

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boundary law summarily. Instead, he insisted that the police power "isvery different from the right of eminent domain, the right of a govern-ment to take and appropriate private property to public use, wheneverthe public exigency requires it; which can be done only on conditionof providing a reasonable compensation therefor. '' 264 A valid policeregulation, he explained, "is not an appropriation of the property to apublic use, but the restraint of an injurious private use by the owner,and is therefore not within the principle of property taken under theright of eminent domain. '"2 5

Chief Judge Shaw concluded that the law "regulated" and did not"appropriate" use rights because, while it stripped Alger of develop-ment rights, it gave him greater security that the rights he retainedwould not expose him to public-nuisance liability later:

The tradesman needs to know, before incurring expense, how nearhe may build his works without violating the law or committing anuisance .... This requisite certainty and precision can only beobtained by a positive enactment, fixing the distance, within whichthe use shall be prohibited as noxious, and beyond which it will beallowed, and enforcing the rule thus fixed, by penalties.2"6

The boundary laws did not appropriate Alger's property, because theyforced him and every other riparian owner into an advantageous ex-change. "[A] more precise and definite law," Chief Judge Shawnoted, would allow everyone to "more certainly know their own andthe public rights, and govern themselves accordingly. '" 267

Confirming the same point, the court construed the statute notto apply retroactively to any portion of Alger's wharf built before thestatute's effective date.2 68 "If any portion of [the wharf's] erection...had been actually made and placed in its position before the [1847]act was passed," the court went out of its way to instruct, "the court areall of the opinion that the owner is not liable to its penalties. '" 269

Before the boundary laws "were passed, every man had a right to buildon his own flats, if the erection did not in fact operate to impedenavigation, and render him indictable as at common law ... and...the common law ... would be sufficient to secure the public againstencroachments. '" 27 Here, Chief Judge Shaw politely suggested, thelegislature could not have intended to create liability for the free useof property when that use of property was lawful at the time. Other-wise, he tacitly implied, the legislature would have created serious ex

264 Id. at 85.265 Id. at 86.266 Id. at 96-97.267 Id. at 103.268 See id. at 103-04.269 Id. at 103.270 [d.

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TAKJNGS, REGULATIONS

post facto and takings problems. 27 1 If the 1843 construction had beenpart of the forced exchange, any reasonable observer would have hadto conclude that the exchange was a loss for Alger as of 1847. In thisscenario, Alger would have gained a potential security from prosecu-tion, while losing the use of a wharf into which he had already sunk agreat deal of time and money. By removing the 1843 constructionfrom the equation, Chief Judge Shaw ensured that Alger's tradeofffocused strictly on the use potential in the 1847 triangle and his liabil-ity potential later. It was at least plausible to say this exchange workedto the equal advantage of Alger and the state.

Nevertheless, Alger is an exceptionally close case, and it is fair toquestion Chief Judge Shaw's conclusions. In particular, he assumedthat owners gained because, if they did not build beyond the newboundary lines, the state would not prosecute them for inflicting apublic nuisance. But the boundary laws did not promise any suchtradeoff explicitly. They only enforced the side of the bargain advan-tageous to the state, the prohibition against building on the state'sside of the line. Thus, if Alger had engaged in new construction onhis side of the line, the state might have prosecuted him for a publicnuisance anyway. The court's decision would have given Alger gooddicta, but no airtight arguments.

ChiefJudge Shaw's opinion does not recite enough of the factualbackground to erase these doubts. Still, the court did protect Alger'smost concrete and valuable right, his right to continue to run a wharfthat was lawful when built. And if there were any residual doubts,Chief Judge Shaw also thought, probably correctly, that he was obli-gated to apply an especially weak form of intermediate scrutiny. Thebottom half of Alger's flats was under water most of the day, and sub-ject to the navigational servitude, in contrast to dry land like farmland. In these circumstances especially, Chief Judge Shaw observed,

it is competent for the legislature to interpose, and by a specificenactment to declare what shall be deemed a dangerous or noxioustrade, under what circumstances and within what distance of habita-tions it may or shall not be set up, how the use of it shall be regu-lated, and to prohibit any other than such regulated use. 272

ChiefJudge Shaw lowered the level of scrutiny here for reasons analo-gous to those the U.S. Supreme Court cites for lowering the level ofFirst Amendment scrutiny appropriate to communications media liketelevision and radio: the overlap between private communications andpublic common-carrier obligations requires especially close legislation

271 See id. at 103-04.272 Id. at 96.

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and regulation. 271 Still, Chief Judge Shaw warned that the shoreline"should be held subject to somewhat more restrictive regulations in itsuse, than interior and upland estate remote from places in which thepublic have a common right."274 When it came to land-use regula-tion, "there is little occasion to impose any restraint upon the absolutedominion of the owner, because such restraint is not necessary to pre-vent it from being injurious."275 It was one thing to defer to a jurispublici regulation; it would be quite another to extend the same defer-ence to a zoning law.

Though a close case, Alger was probably decided consistently withthe principles Chief Judge Shaw became famous for restating. Hisopinion accords with all of the nineteenth-century state regulatory tak-ings cases discussed thus far. All agreed that people held "privateproperty" in the free use of property. Such "property" was qualifiedby the duty to use one's own consistent with use norms that wouldallow everyone else to use their own on the same terms. "Regulations"were legislative enactments that secured to each person in real life the"property" to which she was entitled as a matter of natural right. If alaw restrained the free use of property more than these equal-rightslimitations required, it "appropriated" property, "invaded" or "vio-lated" property rights-and effected a "taking." Courts generally ap-plied intermediate-scrutiny principles, though they varied the level ofscrutiny in specific cases in ways that seem attentive to particular char-acteristics of the regulations at issue.

IIITHE PROGRESSIVE ERA: THE TURN TO

UTILITARIAN PROPERTY THEORY

A. The Demise of the Nineteenth-Century Approach

These nineteenth-century state cases have either been overlookedor badly misread. Conventional lore now holds that takings principleswere not originally meant to cover regulations, only condemnationsand government trespasses. The first real regulatory takings decision,this story continues, came in the 1922 Supreme Court decision Penn-sylvania Coal Co. v. Mahon.

The reality is much more interesting than the narrative. Ameri-can regulatory takings law tracks the massive changes that took placein the rest of American constitutional law from the late nineteenthcentury to the early twentieth. In The Constitution and the New Deal, G.

27 See, e.g., Red Lion Broad. Co. v. FCC, 395 U.S. 367, 375 (1969) (holding that theFirst Amendment was enhanced rather than infringed by FCC order and regulationspromulgated under the fairness doctrine).

274 Alger, 61 Mass. (7 Cush.) at 95.275 Id.

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Edward White rendered a very useful service by showing that whatmost scholars accept as "the New Deal revolution" was actually the tailend of a two-generation-long revolution in academic and jurispruden-tial thought. 276 The nineteenth-century constitutional order did notrecede during the New Deal in the face of an external political assault;it collapsed from 50 years' worth of internal dry rot. Although Whitedid not cover takings law in his book, it provides powerful corrobora-tion for his thesis.

Regulatory takings law provides an excellent test case for White'sthesis because federal judges took a century longer than their statebrethren to start hearing takings cases. The state cases analyzed in thelast Part display all the features of what White calls "guardian re-view." 277 State judges marked off broad distinctions among regula-tions that stopped owners from using property to interfere with theirneighbors' rights, regulations that enlarged property owners' freedomto pursue common uses, and regulations that restrained the propertybecause they did neither. White describes such rights in terms of"prepolitical, essentialist constitutional principles, '" 278 but that is just ahistorian's nonpartisan locution for what nineteenth-century juristscalled "constitutional protections securing natural rights." Courts indifferent states and at different times applied this doctrine throughdifferent positive-law constitutional authorities, but the doctrine itselfremained strikingly consistent with natural-right principles.

Federal courts, by contrast, developed no corresponding body ofregulatory takings case law over the course of the nineteenth century.It is not that federal courts were hostile to regulatory takings per se;they just did not hear many takings cases, of any sort. Barron v. Balti-more cut off the federal courts from hearing takings challenges to statelegislation, 279 except when such challenges arose in diversity jurisdic-tion.280 Moreover, there were extremely few federal judicial proceed-ings over federal takings claims during that period. For most of thenineteenth century, when Congress needed to take land, it tended torely on state eminent-domain powers or to pay compensation itself byprivate-bill legislation. 281 This system did not really change until 1887,when Congress enacted the Tucker Act, which removed compensa-

276 See G. EDWARD WHITE, THE CONSTITUTION AND THE NEW DEAL_ (2000).277 Id. at 4.278 Id.

279 See Barron v. Mayor of Balit., 32 U.S. (7 Pet.) 243 (1833).280 For a review of federal diversity-jurisdiction takings cases, see Michael G. Collins,

Before Lochner-Diversity Jurisdiction and the Development of General Constitutional Law, 74TUL. L. REV. 1263, 1288-91 (2000).

281 See Floyd D. Shimomura, The Histoy of Claims Against the United States: The Evolution

from a Legislative Toward a Judicial Model of Payment, 45 LA. L. REV. 625, 643-62 (1985);Stoebuck, supra note 40, at 559 & n.18 (citing Kohl v. United States, 91 U.S. 367 (1875).

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tion from the legislative process, waived the federal government's sov-ereign immunity, and established a comprehensive statutory schemefor seeking compensation through the judicial process.28 2

Given these facts, the federal courts were not in a position to hearregulatory takings cases until 1897, when the Supreme Court held thatthe Due Process Clause of the Fourteenth Amendment incorporatedtakings principles. 28 As this Part demonstrates, the Supreme Courtdid draw upon nineteenth-century takings principles-to a limited ex-tent-once it got into the regulatory takings game. But even thoughnatural-right ideas made some headway, other factors ultimatelycaused the Court to take the law in a different direction. One factorwas that the Court heard particularly difficult cases during the Pro-gressive Era. The cases from the 1910s and 1920s present some of themost challenging problems in due process and takings law. 284 Fromthe nineteenth-century perspective, the Court decided some of thesedecisions correctly, others incorrectly, but the wrong decisions unset-tled the law, at an early and critical stage.

The most important factor was that, by the 1920s, courts wereabandoning what White calls "guardian review" for what he calls "bi-furcated review."285 Courts gave extra protection to freedoms withwhat White terms a "preferred position," but not to a property-cen-tered freedom like takings. 28 6 The legal academy was revolutionizingthe study of law. Natural-right property theory was out; Benthamitesocial utilitarianism was in. 287 In 1911, Frank Goodnow, a Professor ofConstitutional Law at Columbia, explained that "most American law-yers regard [ed] even the two great theories of social compact and nat-ural rights as of themselves inapplicable as legal principles. '"2 88 Some

282 Ch. 359, 24 Stat. 505 (1887); see Langford v. United States, 101 U.S. 341, 342-43(1879) (rejecting argument that a government taking without just compensation createdan implied obligation to pay, enforceable in the Court of Claims).

283 See Chi., Burlington & Quincy R.R. v. Chicago, 166 U.S. 226 (1897). Even here, theCourt did not "incorporate" the Fifth Amendment selectively; it took a page from earlierstate courts and held that takings principles were implied from the Due Process Clausebecause they were "'founded in natural equity"' and "'laid down by jurists as a principle ofuniversal law."' Id. at 236 (quoting JOSEPH STORY, 2 COMMENTARIES ON THE CONSTITUTIONOF THE UNITED STATES § 1790 (5th ed. 1891)); see also William Michael Treanor, Jam forJustice Holmes: Reassessing the Significance ofMahon, 86 CEO. L.J. 813, 831-32 (1998) (notingChicago, Burlington & Quincy Railroads reliance on natural-law principles instead of selec-tive incorporation).

284 For a useful summary of "takings" challenges decided by the Supreme Court underthe Contracts Clause and the Fourteenth Amendment, see Joseph Gordon Hylton, Preludeto Euclid: The United States Supreme Court and the Constitutionality of Land Use Regulation,1900-1920, 3 WASH. U.J.L. & PoL'Y 1 (2000).285 See WHri-rE, supra note 276, at 4.286 See id. at 145.

287 See discussion infra Part lI.D.2; DAVID M. Ricci, THE TRAGEDY OF POLITICAL SCI-

ENCE: POLITICS, SCHOLARSHIP, AND DEMOCRACY 29-56, 90-94 (1984).288 FRANKI,. GooINOW, SOCIAL REFORM AND THE CONSTITUTION 4 (1911).

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federal judges, like Holmes and Brandeis, led the charge against thesocial compact and natural rights in the academy before being ele-vated to the bench. 28 9 Others who were not academics themselveshad been educated by "academic scribbler[s] of a few years back"290

with views similar to those of Holmes and Brandeis. One of the maincomplaints about the old regime under the social compact was that itgave too much constitutional protection to property. Thus, when reg-ulatory takings ideas finally percolated into the federal courts, a signif-icant segment of the bench reflected the hostility to natural propertyrights emanating from the legal academy.

This Part canvasses the leading Supreme Court takings and due-process challenges to land-use regulations over the course of the1910s and 1920s, illuminating two features. From the historian's per-spective, this Part highlights the tension evident in the law betweenthe natural-right theory that informed the nineteenth-century statelaw and the utilitarian theory that has prevailed ever since. From thelawyer's perspective, this Part canvasses the seminal decisions to seehow the natural-right approach handles their respective problems.These cases stand as metaphors for the assumptions that regulatorytakings law is inescapably arbitrary and standardless. As this Part willshow, as a matter of law, natural-right theory was able to generate tol-erably clear standards for evaluating all of the cases, while the brandof utilitarianism in vogue during the Progressive Era was not. If earlytwentieth-century utilitarian property theory has other redeeming fea-tures over natural-right theory, doctrinal clarity is not one of them.

B. Hadacheck v. Sebastian: Regulating Pollution over Time

1. The Natural-Right Approach

One of the earlier decisions from this period is the 1915 brick-yard case Hadacheck v. Sebastian.29 1 Los Angeles had enacted an ordi-nance outlawing brickyards and brick kilns in a zone of the city andthen arrested Hadacheck for operating a brickyard in violation of theordinance.2 92 Hadacheck raised several different constitutional chal-lenges to the ordinance, including a federal substantive due processchallenge. 293

289 Id. at 273-84; see also G. Edward White, The Canonization of Holmes and Brandeis:Epistemology and judicial Reputations, 70 N.Y.U. L. REV. 576, 581 (1995) (remarking that bothHolmes and Brandeis believed that "humans had the freedom and power to change themeaning of legal principles if they so chose").290 See JOHN MAYNARD KEYNES, THE GENERAL THEORY OF EMPLOYMENT INTEREST AND

MONEY 383 (1936).291 239 U.S. 394 (1915).292 Id. at 404.293 See id. at 398, 407, 413.

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The California and United States Supreme Courts rejectedHadacheck's challenge on the same grounds as many of the pollutioncases discussed in the previous Part. Both courts recognized that thecity was trying to abate a documented nuisance. 294 When the Califor-nia Supreme Court considered whether Hadacheck's brick kilnsmight "be rendered entirely innocuous by proper regulation prescrib-ing the manner of doing the work," it implied that time-and-mannerregulations were more ideal "regulations" than prohibitory regula-tions. 295 When the court determined that brick burning was too dirtyand sooty to be compatible with residential living, it concluded thatthe evidence overcame the "contention that the prohibition was amere arbitrary invasion of private right."296 The U.S. Supreme Courtaffirmed on the same basis. 297

2. The "Coming to the Nuisance" Problem

Nevertheless, Hadacheck is a conceptually difficult decision be-cause it highlights a phenomenon known as "coming to the nui-sance."2 99 8 Hadacheck did not build his brickyard in the middle of analready-residential section of Los Angeles. He had been operating inan undeveloped neighborhood for at least eight years. It was hisneighbors' development that crept up to the limits of his brickyard. 299

The California and U.S. Supreme Courts dismissed this fact offhand,saying "that no complaint could be based upon the fact that petitionerhad been carrying on the trade in that locality for a long period."30 0

Their treatment of the coming-to-the-nuisance problem was typical.Almost a century earlier, the Coates court had allowed New York Cityto exclude cemeteries that had been operating in that locale for sixtyand one-hundred years-'4° New York City could wait, the court confi-

294 See id. at 409 (noting that the court below found that the local residents were "seri-ously incommoded by the operations" of Hadacheck's brickworks); Ex parte Hadacheck, 132P. 584, 586 (Cal. 1913) (assuming that the ordinance was enacted because Hadacheck'sbusiness was "detrimental to the welfare of others").

295 See Ex parte Hadacheck, 132 P. at 586 (distinguishing Ex parte Kelso, 82 P. 241 (Cal.

1905)).296 Id.

297 See Hadacheck, 239 U.S. at 409-12.298 1 am grateful to participants at a University of San Diego Law School workshop,

including Sai Prakash, Steven Smith, and Larry Alexander, for convincing me to explainmore fully the logic behind freedom of action in property. I am especially grateful toProfessor Alexander for convincing me to analyze the coming to the nuisance problem indepth.

299 See Ex pare Hadacheck, 132 P. at 585-86.300 239 U.S. at 408-09; see 132 P. at 586.

30 1 See Coates v. City of New York, 7 Cow. 585 (N.Y. Sup. Ct. 1827); Brick PresbyterianChurch v. City of New York, 5 Cow. 538 (N.Y. Sup. Ct. 1826).

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dently explained, until "the state of things [was] such as to render theact complained of a nuisance upon actual experiment. '" 302

This position strikes most observers as strange. Hadacheck seemslike a sympathetic litigant because he built his brickyard in an unde-veloped location. Los Angeles might condemn the brickyard later tomake way for development, the intuition runs, but at least it couldhave paid Hadacheck to move. 303 The churches complaining in Coatesand Brick Presbyterian Church have even stronger claims because theyran their cemeteries for decades before New York City shut themdown.

This intuition presents a serious challenge to the nineteenth-cen-tury view of regulatory takings. Hadacheck encapsulates a problem thatany zoning system must confront. Land-use conditions change overtime, and the transitions between one planning arrangement and thenext can be abrupt. If the nineteenth-century approach could not ex-plain why Hadacheck was inflicting "harm" on his neighbors, it wouldbe fair to wonder whether natural-right principles could regulate eve-ryday land-use problems. Frank Michelman thus criticizes the deci-sion in Hadacheck relentlessly to prove "that there is no basis for ageneral rule dispensing with compensation in respect of all regula-tions apparently of the 'nuisance-prevention' type. '30 4

3. The Centrality of "Freedom of Action" to Property Regulation

In fact, however, it is possible to draw the line between "harmful"or "noxious" and "legitimate" activities in coming-to-the-nuisancecases-provided one really wants to draw it. Michelman doubts such aline may be drawn, but only because his theory of property erases it.He believes owners do not acquire "property" in specific uses of prop-erty until they support those uses with "investment-backed expecta-tions.''30 5 If the homeowners in Hadacheck had developed theneighborhood before Hadacheck first fired his brick kilns, Michelmanwould readily agree that the cinders and smoke from the kilns wouldcause the homeowners "harm." When homeowners sink "expecta-tions" into their clean and quiet neighborhood, Michelman says,"[s] ociety, by closing the brickworks, simply makes you give back thewelfare you grabbed; and, since you were not authorized in the firstplace to make distributional judgments as between you and me, youhave no claim to compensation."3 °

06 By contrast, when the brickmaker

302 Coates, 7 Cow. at 605.303 See, e.g., DANIEL R. MANDELVER, LAND USE LAW § 2.10, at 25 (4th ed. 1997) ("The

equities of the case lay strongly with the brick works owner.").304 Michelman, supra note 22, at 1197; see id. at 1236-37, 1242-44.305 See id. at 1211-13.306 Id. at 1236.

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builds first (as he did in the actual case), Michelman concludes thatthe brickmaker has "property" in his brickworks because he has beenrunning it for a long time, but his neighbors have no "property" intheir lots because they have not yet invested time, money, or labor intheir lands.3 07 Michelman doubts that Hadacheck was the culpableparty, but his skepticism is unwarranted unless his expectations theorymakes sense and natural-right nuisance controls do not.

The natural-right approach differs from Michelman's because itgrounds use rights, and all other rights incident to property, in theconcept of "freedom of action." Freedom of action measures howmuch freedom people and groups possess to pursue their own distinctgoals with as little outside interference as possible. This concept maybe abstract in certain respects, but no more so than "expectations,""utility," and a wide range of other concepts that abound in modernproperty theory.308 Freedom of action can explain behavior and goalsin a wide range of situations. It is relevant in foreign affairs. 0 9 Whilethe United States may be as concerned about North Korea's inten-tions toward us as it was about Iraq a year ago, it has less freedom ofaction to deter or pre-empt North Korea.3"1 China's military powerand North Korea's nuclear-arms programs limit America's strategiestoward North Korea in ways that the Iraqi conflict has not.3 11 Free-dom of action provides a useful way to describe the harms people suf-fer from non-bodily torts. When a person is defamed, for instance,the defamation causes other members of society to shrink from doingbusiness with the victim in public."1 2 There are other ways to charac-terize each of these situations. Still, in each case, freedom of actionprovides a useful way to describe the interests of or consequences onthe actor.

307 According to Michelman,

when the destiny of land areas is indeterminate or unclear[,] ... [t]here isno denying that the brickmaker may be grabbing some value for himself,but the value he grabs may be value in suspense, value unowned, value un-specified, vacant value. He acquires "possession" of it not by theft or con-version but by original occupation, which by all common understandinggives him title.

Id. at 1244-45.308 See supra Part IB; see also Epstein, Erratic Holmes, supra note 170, at 876-82 (discuss-

ing the historical background of the Takings Clause); Mossoff, Locke's Labor Lost, supra note170 (examining Locke's theory of property within his natural-law philosophicalframework).

309 See, e.g., Harold W. Rood, The War for Iraq: A Study in World Politics (Apr. 14, 2003),http://www.Claremont.org/writings/030320rood.html.

310 See James T. Laney & Jason T. Shaplen, How to Deal with North Korea, 82 FOREIGN

AFF. 16, 18-19 (2003).311 See id. at 21-22.312 See W. PAGE KEETON ET AL., PROSSER AND KEETON ON THE LAW OF TORTS § 111, at

771-85 (5th ed. 1984); see also 2 WILSON, supra note 62, at 593-96 (discussing the impor-tance and effect of honor and reputation).

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Natural-right theory centralizes the concept of freedom of actionin property law. Property is an individual right. It gives owners amoral entitlement to a zone of freedom because that freedom encour-ages people to respond to self-centered motivations, like the acquisi-tive and industrious passions that spur them to work. By encouragingthese productive passions, property encourages people to pursue obvi-ous personal goods like self-preservation and advancement. Becauseproperty encourages such useful, selfish tendencies, the freedom asso-ciated with property is a self-centered freedom. 13 To borrow from aclassic property case, if two neighbors build competing duck-decoyponds, in ordinary circumstances each should prefer to compete byimproving his own pond rather than by scaring ducks off the other'spond. In both arrangements, each pond owner stands in the samerelation to the other. But in the former, each pond owner has a greatdeal of freedom of action to use his own pond and labor to make aliving; in the latter, each has the power to stop the neighbor frommaking a living, but little freedom to use what is nearest and dearestto him for his own preferred purposes. 314

This principle of freedom of action supplies the logic by whichthe law of nature orders property rights in close quarters. Unlike thedecoy-pond conflict, most land-use conflicts pit two heterogeneousproperty uses against each other. Some land uses are presumptively"noxious." To borrow Michelman's phrase, to conduct a noxious useon one's own land, an owner must also "grab" a chunk of neighbors'equal shares of free action and control over their own property.315 Toreturn to the international-relations analogy, the North Korean gov-ernment is currently grabbing more than its fair share of free actionin the international community because it is developing nuclear weap-ons and it cannot be trusted to use them defensively;31 6 gunpowderplants grab more than their fair share of property-use rights in mostneighborhoods because they may explode accidentally. In the formercase, it is the government that is volatile, in the latter it is the gunpow-der that is volatile, but the principle remains the same.

At the other extreme, some land uses are presumptively"dainty. '317 These uses are so delicate that neighbors disturb and up-set them even when the neighbors stay within their fair share of userights. In other words, a dainty and delicate use exploits the law justas a noxious use exploits the absence of law. To continue the interna-tional-relations analogy, there is a perceptible difference between

313 See supra Part I.C.314 See Keeble v. Hickeringill, 103 Eng. Rep. 1127, 1128 (K.B. 1707).315 See Michelman, supra note 22, at 1236.316 See Laney & Shaplen, supra note 310, at 19-21.317 This discussion relies on a distinction set forth and discussed at length in Tuttle v.

Church, 53 F. 422, 425-27 (C.C.R.I. 1892).

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agreeing to control a rogue state like North Korea and agreeing to apact in which each signatory agrees to police how all the others en-force their domestic highway-traffic laws. In land-use law, there is asimilarly perceptible difference between complaining when a neigh-bor builds a gunpowder plant and complaining when she puts an un-sightly style of siding on her home." 8

Equal freedom of action does not rank conflicting land uses; itfocuses on the extent to which each use restrains the free action avail-able for other land uses in the neighborhood. To be sure, it is notalways easy for the law to quantify freedom of action or describe itconcretely. But this problem does not mean that freedom of action isa meaningless concept. Courts still enforce the law of libel and slan-der even though it is difficult to quantify how a damaged reputationinjures its owner. The law of nature can sketch out a continuum likethe distinction between noxious and delicate land uses. But to givereal-life force to this distinction in principle, the law of nature needsfact-based tests to apply through the positive law.

As Part II.D explained, nuisance law has a few such tools. Gen-eral community opinions provide some guidance, and the law can alsotry to measure how much different land uses consume common re-sources like air, water, and quiet, but the physical-invasion test proba-bly provides the sharpest positive-law standard.3 19 None of thesefactors-opinion, pollution quotas, or the invasion test-is an endunto itself; each serves as a proxy for the extent to which differentland uses restrain neighbors' free action over their own property.Properly applied, these tests establish the "nuisance prevention" prin-ciple that Michelman and others criticize.

4. Freedom of Action When a Homeowner Comes to a Nuisance

When land-use law takes its bearings from the principle of equalfreedom of action, Hadacheck's resolution of the "coming to the nui-sance" problem logically follows. To be sure, the main issue is whichsubstantive theory-Michelman's expectations-based theory, natural-right theory, or some other theory-best describes the scope of themoral entitlement that owners ought to enjoy in their property. Still,if the natural-right theory makes sense on its own terms, the result inHadacheck is not as arbitrary or absurd as Michelman suggests.

On one side, Hadacheck's brickworks are presumptively noxious.Brickmaking is a lawful and useful trade, but the smoke and cinders itgenerates make it difficult or impossible for neighbors to use theirown properties as residences, offices, or a wide range of other uses.

318 See, e.g., KEETON ET AL., supra note 312, § 88, at 626-30; 2 KENT', supra note 7, at 276(contrasting the public nature of charities with the private character of corporations).

'19 See supra note 174 and accompanying text.

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Measured by any of the positive-law tools mentioned above, brickmak-ing grabs more than its fair and equal share of free action in a mixed-use neighborhood.

On the other side, Hadacheck's neighbors still have property inthe use potential in their land-even when they have not yet devel-oped it. According to Michelman, the neighbors acquire no "prop-erty" right to object to Hadacheck's pollution until they putpsychological "expectations" into the land by building a home andliving in it.32

0 Under the natural-right approach, land, like any otherspecies of property, automatically carries with it a right to use it forone's own ends. In principle, an owner has equal right to enjoy landfor a use she has already developed, to change uses, or to develop onundeveloped land. Use potential may be more speculative and lessvaluable than actually exploited rights, but that is different from say-ing that there is no property in use potential at all. Recall howMadison defined property, to reach beyond dominion over externalpossessions to cover "every thing to which a man may attach a valueand have a right."3 2 1 In Jacobs, the New York Court of Appeals did notask whether the Jacobs family's rent reflected any psychological expec-tations that they might use the apartment as both a residence and asmall business. Rather, the family had presumptive "property" in thebusiness use because property's "capability for enjoyment and adapta-bility to some use are essential characteristics and attributes withoutwhich property cannot be conceived. ' '322

Because Hadacheck's neighbors have "property" in the potentialof their land while that land is undeveloped, the law can say thatHadacheck "harms" the neighbors as soon as he starts firing his brickkilns. Brickmaking is a legitimate and useful trade, and Hadacheckacted commendably by running brick kilns where he would not pol-lute anyone's home. These facts, however, do not prove that hisbrickmaking is any less noxious. While the land surrounding hisbrickworks was undeveloped, Hadacheck may not have inflicted a"harm" in the sense that he constructively evicted any neighbors fromtheir properties. But he still harmed them by foreclosing the range ofchoices his neighbors held for developing their lots.

At the same time, this harm is harder to regulate than that in-flicted on an owner who has developed her land. Neighbors may have"property" in the use potential in their undeveloped land, but suchpotential is not very sharply defined. Recall how Alger took the usepotential in his wharf rights subject to liability potential if navigation

.320 See supra notes 305-07 and accompanying text.

321 14 THE PAPERS OF JAMES MADISON, supra note 75, at 266.322 In reJacobs, 98 N.Y. 98, 105 (1885).

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patterns changed in Boston Harbor.323 Similarly, even if Hadacheckmay not stamp the neighborhood with an industrial character by hisown land uses, his brickmaking may attract subsequent industrial de-velopment and tip the neighborhood under the locality rule.324 Onthe other hand, Hadacheck probably will not acquire any "propertyrights," strictly speaking, unless and until the neighborhood tips to-ward industry.

Furthermore, although the neighbors have property rights, it isobvious that Hadacheck's brickmaking business is worth much moreto him than their undeveloped use potential is to them. Michelman'sanalysis is insightful to this extent. Hadacheck has invested considera-ble time, labor, and capital in his brickworks. The neighbors are los-ing choices, but their losses must be offset by the fact that their landremains compatible with and valuable for industrial uses. If a neigh-bor had made clear that she prefers residential to industrial uses, thelaw would certainly have to respect her wishes and protect her rights.It is not clear, however, whether the law should respect anything shesays regarding which uses she values most until she puts her moneyand her mailbox where her mouth is. Otherwise, the law would makeit too cheap and easy for residents who are not using their land toharass industrial polluters before conflicts arise.

As a result, the better course is to defer action against the poten-tial harm now to see whether actual harm develops later. The logichere is similar to that in Alger, in which Chief Judge Shaw concludedthe boundary law "regulated" Alger's flats only because better-definedboundary lines enlarged Alger's wharf rights more than they strippedhim of use potential.3 25 Epstein has explained the exchange in "com-ing to the nuisance" cases. If nuisance liability does not attach untilneighbors build next to the brickworks, it temporarily strips the neigh-bors of the right to sue to protect their lost use potential, but it alsostrips Hadacheck of the right to assert a limitations or laches defenseafter liability attaches and the neighbors sue. Indeed, this approachenlarges the rights of all, because it offers each side legal protectionwhen its rights are most valuable. Before the neighbors develop theirland, Hadacheck's brickworks are more valuable to him than theneighbors' undeveloped use potential is to them. But when theneighbors decide to invest time, money, and labor into their land, thelaw protects their right to make of their lands what they want. '2"

32- See supra notes 248-71 and accompanying text.324 See discussion infra Part II1.E.5.

325 See supra Part 1I.E.3.326 See EPSTEIN, TAKINGS, supra note 32, at 119-20; EPSTEIN, TORTS, supra note 174,

§14.6.2; Richard A. Epstein, Nuisance Law: Corrective Justice and Its Utilitarian Constraints, 8J.LEGAL Srun. 49, 72-73 (1979).

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There still may be an equitable case for compensatingHadacheck. Because changing land-use patterns create problems forany system of land-use regulation, Hadacheck still seems sympatheticto many observers. Within the natural-right framework, however, it isimportant for takings law to be clear that payment to a Hadacheck isnot a property or constitutional entitlement but rather an act of legis-lative grace. When payments to the Hadachecks of the world come tobe seen as a matter of right, they suggest that first-in-time owners canacquire "property" not only in the use on their own land but also inthe use potential of land next door. Powerful political forces in mosttowns want to use land-use laws to protect their preferred uses ofproperty and exclude outsiders who prefer competing uses. Any the-ory of property that confers to Hadacheck a property right in his brickkilns automatically gives insiders in every town a principled basis forfreezing current land-use patterns. Such a theory empowers them tostrip new owners of the airspace over their undeveloped land. Thisdanger surfaces with a vengeance in modern zoning law.32 7

C. The Billboard Cases: Eyesores and the Free and Equal Use ofProperty

As Hadacheck shows, when it came to presumptively noxious activi-ties, the Supreme Court was comfortable enough with natural-rightharm-prevention principles to decide difficult cases in the spirit ofthose principles. At the other end of the spectrum, however, whenreviewing regulations protecting "dainty" or "delicate" uses of prop-erty, it is harder to judge the Supreme Court's work. In two laconicand ambiguous decisions, Cusack Co. v. Chicago and St. Louis Poster Ad-vertising Co. v. St. Louis, the Court upheld city billboard controls asreasonable exercises of the state's power to control nuisances. 328 Cu-sack and St. Louis Poster Advertising have been cited as further proofthat it is impossible to apply natural-right principles to regulations.Michelman cites billboard controls as proof that there is no suchthing as a nuisance-control rationale, because there is no principledway to determine whether a billboard law "prevents the 'harms' ofroadside blight and distraction, or ... secur[es] the 'benefits' of safetyand amenity."329 Nevertheless, while Cusack and St. Louis Poster Adver-tisingdid not settle all the questions raised, it is possible in principle todistinguish the harms and benefits that billboards cause.

Billboard laws test the natural-right conception of the policepower because the most frequent complaints about billboard laws re-

327 See infra Part III.E.3128 See St. Louis Poster Adver. Co. v. City of St. Louis, 249 U.S. 269 (1919); Thomas

Cusack Co. v. City of Chicago, 242 U.S. 526 (1917).329 Michelman, supra note 22, at 1197.

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late to aesthetic problems. If industrial pollution lies at the "noxious"end of the free-action spectrum, aesthetic complaints lie at the"dainty" and "delicate" end.330 With industrial pollution, the dangerto the equal and free use of property lies in underregulation; with aes-thetic controls, the danger lies in overregulation. It is just as legitimateto dislike a billboard or a large advertisement as it is to like operatinga factory. But just as pollution exploits the absence of law to grab adisproportionate share of free-use rights, aesthetic controls exploit thelaw to do the same. Consider, for example, how aesthetic controlsfare under the positive-law test on which natural-right-based nuisancelaw used to rely. Nuisance law used to gauge whether an owner wasusing more than her fair share of a common resource like air, water,or quiet.33' In most neighborhoods, by contrast, there is no commonpool for aesthetic tastes. People tend to disagree more about whatkinds of art and decor are annoying than they do about how heavypollution must be before it becomes annoying. Separately, the physi-cal-invasion test highlights the same free-use problem from a differentperspective.3 3 2 If a land use is noxious because it generates pollution,the only residents who may sue are those who directly suffer from thepollution. If the use is noxious merely because it is unsightly, anyonein town has a principled basis for complaining.

If local land-use law tries to abate billboards for purely aestheticreasons, then, it can turn in one of two directions. On one hand, if itstays principled, the law will give the billboard owners and everyoneelse in town legal power to complain about a wide range of potentialeyesores. Since eyesores are a matter of taste, in principle billboardrestrictions would quickly generate a series of other equally plausibleaesthetic restrictions. As such restrictions proliferated, neighborscould do to each other with the law what pond owners could do with-out it.13 3 On the other hand, local land-use law might try to regulatesome eyesores, but not all. But, excepting moral nuisances involvingviolence or pornography, for example, most eyesores are interchange-able. If beauty lies in the eye of the beholder, it is equally legitimateto like or dislike a certain use of property. If the law restrains owners'free use of their property to abate some eyesores and not others, itimposes deep restraints on some owners' use rights to protect theirneighbors' aesthetic tastes. The law encourages a narrow majority in alocality to impose its aesthetic and cultural tastes on nonconformingminorities, in violation of equal rights.

330 See discussion supra note 317 and accompanying text.331 See discussion supra note 173 and accompanying text.4 3 2 See discussion supra note 174 and accompanying text; see also EPSTEIN, TAKINGS,

supra note 32, at 118 (noting that "advertisements beside the public highway ... cannot beenjoined as public nuisances" but can be enjoined under the physical-invasion test).

333 See supra note 314 and accompanying text.

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Some state courts grasped the natural-right implications of thesecontrols. 334 Shortly before it decided Hadacheck, for instance, the Cali-fornia Supreme Court spoke to this problem in the 1909 decision Var-ney & Green v. Williams.335 The court concluded that the reason thetown council of East San Jose

acted is that the appearance of billboards is, or may be, offensive tothe sight of persons of refined taste. That the promotion of aes-thetic or artistic considerations is a proper object of governmentalcare will probably not be disputed. But, so far as we are advised, ithas never been held that these considerations alone will justify, asan exercise of the police power, a radical restriction of the right ofan owner of property to use his property in an ordinary and benefi-cial way. Such restriction is, if not a taking, pro tanto of the prop-erty, a damaging thereof, for which ... the owner is entitled tocompensation.

336

Quoting a New Jersey case on point, the California Supreme Courtcontinued: "AEsthetic considerations are a matter of luxury and indul-gence rather than of necessity, and it is necessity alone which justifiesthe exercise of the police power to take private property withoutcompensation."

337

Of course, in some circumstances, billboards might raiseproblems that go beyond aesthetic judgments and require nuisanceregulation. In Varney & Green, the California Supreme Court distin-guished many of the billboard precedents it reviewed on the groundthat they dealt with indecent advertisements, billboards that had a se-rious chance of collapsing, or signs that tended to be dangerous to thesafety of the public. 33 Each of these concerns could justify a bill-board regulation, but takings law would need intermediate scrutiny tobe certain. When legislatures could point to substantiated health,safety, and pollution concerns, courts would be perfectly justified ingiving them the benefit of the doubt. But if legislatures had fairly thinrecords, courts would have to reserve judgment. Courts might haveprincipled reasons to give legislatures the benefit of the doubt when itcame to determining whether alcohol causes crime, but it would dis-

334 Compare, e.g., People v. Norton, 288 P. 33 (Cal. App. Dep't Super. Ct. 1930) (defer-ring to legislative attempts to control billboards), and Preferred Tires, Inc. v. Village ofHempstead, 19 N.Y.S.2d 374 (N.Y. Sup. Ct. 1940) (same), with Pac. Rys. Adver. Co. v. Cityof Oakland, 276 P. 629, 632-33 (Cal. Dist. Ct. App. 1929) (declaring advertising restric-tions invalid), and Schloss Poster Adver. Co. v. City of Rock Hill, 2 S.E.2d 392, 394-95 (S.C.1939) (same).335 100 P. 867 (Cal. 1909), overruled by Metromedia, Inc. v. City of San Diego, 592 P.2d

728 (Cal. 1979).336 Id. at 868.337 Id. (quoting Passaic v. Paterson Bill Posting, Adver. & Sign Pointing Co., 62 A. 267,

268 (N.J. 1905)).338 See id.

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tort natural-right principles to apply similar deference to claims thatbillboards attract crime.33

Cusack and St. Louis Poster Advertising are ambiguous decisions be-cause they were not thorough enough to address these concerns. InCusack, the Supreme Court recited record evidence showing that, be-cause the owners of billboard lots did not monitor them closely, theytended to accumulate garbage, generate fires, and encourage vagrantsto assault passers-by. 40 If substantiated, this evidence might have sup-ported the city's determination to abate billboards as an anti-crimeand anti-pollution measure. Still, the Court could have remandedwith instructions that the trial court press the city to explain why thesame nuisances could not have been controlled with restraints less se-vere than a blanket prohibition on billboards. The Court did not takethis extra step in Cusack or in St. Louis Poster Advertising, which uphelda St. Louis billboard ordinance essentially on Cusack's authority.341

These decisions created threatening precedents but did notalone upset the Court's developing land-use case law. On one hand,the Court probably did not scrutinize the Chicago and St. Louis ordi-nances as closely as intermediate scrutiny required. In failing to doso, the Court suggested that it might turn a blind eye to other aes-thetic land-use regulations. On the other hand, these decisions didnot upset the broad distinctions in principle between legitimate andproblematic nuisance-control regulations. They recognized that aes-thetic regulations fell on the problematic end of the spectrum.342 Be-cause billboard ordinances could be justified on several grounds,these constitutional challenges were bound to be hard cases, of lim-ited precedential value in starker cases. As long as cities continued todefend billboard ordinances by pointing to documented pollutionand crime-control problems, the contours of the nuisance-control ra-tionale would remain intact.

D. Pennsylvania Coal Co. v. Mahon, or Natural-Right Principles'Half-Hearted Entrance into Federal Takings Law

Because Hadacheck and the billboard cases were due process deci-sions, the Supreme Court's first real "regulatory takings" case came in

339 See supra Part IIC; infra Part III.E.7.

3140 See Thomas Cusack Co. v. City of Chicago, 242 U.S. 526, 529 (1917).

341 See St. Louis Poster Adver. Co. v. City of St. Louis, 249 U.S. 269, 274 (1919) (quot-ing Thomas Cusack Co., 242 U.S. at 529-30).342 See, e.g., St. Louis Poster Adver. Co., 249 U.S. at 274 (upholding the St. Louis ordi-

nance on nuisance-control grounds and emphasizing that aesthetic considerations wereonly "trifling requirements" in the ordinance).

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Pennsylvania Coal Co. v. Mahon.343 Here, the natural-right approachexperienced both its greatest advances and its worst setback in federaltakings law. Mahon was ironic because the Court's opinion was writtennot by any of the conservatives on the bench, but by progressive iconJustice Holmes, famous for dissenting in Lochner v. New York. 344 If oneunderstands the natural-right theory at work in the early state cases,the irony becomes even stronger. Justice Holmes's decision reads likea fusion of nineteenth-century takings black-letter law and twentieth-century property theory.

1. Natural-Right Takings Doctrine

The Pennsylvania Coal Company sued the Mahons to challengethe constitutionality of a state statute forcing it to bear a duty ofground support, which the company had contracted away decades ear-lier.345 In 1878, the company executed a deed conveying surfacerights to the homeowners above its coal mines.3 46 The deed reservedto the company the right to mine for coal beneath the surface andexpressly assigned to the surface owners the risk of subsidence. 347

Margaret Mahon's father was one of the original owners, and hishouse passed to her.3 48 More than 40 years later, however, the Penn-sylvania legislature enacted the Kohler Act, which stripped the com-pany of its mining rights by barring it from mining for anthracite coalin any way that might cause the subsidence of houses.3 49

Justice Holmes's opinion for the Court is surprisingly modern inmany respects, but each of the crucial legal steps in his opinion drawsupon nineteenth-century natural-right black-letter law. Like earlierstate court judges, Justice Holmes held that "private property" was atstake. He was quite confident that the Kohler Act "destroy[ed] previ-ously existing rights of property and contract" because it imposed onthe company a duty of ground support that the company had previ-ously deeded away.350

343 260 U.S. 393, 415 (1922) ("[W]hile property may be regulated to a certain extent,if regulation goes too far it will be recognized as a taking."); seeJEsSE DUKEMINIER &JAMES

E. KRIER, PROPERTY 1148-51 (5th ed. 2002).344 198 U.S. 45, 74-76 (1905) (Holmes,J., dissenting).

345 Mahon, 260 U.S. at 412-13.346 Id. at 412.

347 Id. Ironically, many coal companies still fixed subsidences they had caused, at theirown expense, even though the deeds assigned the risk of subsidence to the surface owners.See WILLIAM A. FISCHEL, REGULATORY TAKINGS: LAW, ECONOMICS, AND POLITICS 37-41(1995).348 See Treanor, supra note 283, at 818.

349 Mahon, 260 U.S. at 412-13 (citing 1921 Pa. Laws 1198).350 See id. at 413.

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The bulk of the Court's opinion focused on the question whetherthe Kohler Act was a legitimate exercise of the police power 35 1-thatis, whether it was a bona fide regulation of a safety threat to theMahons and surface owners like them. Here, Justice Holmes appliedprinciples of intermediate scrutiny, far from the deference he had rec-ommended in Lochner,35" more consistent with earlier state takingsand police-power cases. He doubted that the Kohler Act was 'justifiedas a protection of personal safety," because such protection "could beprovided for by notice" to the Mahons before the coal companystarted excavating beneath their house.353

Even more interesting, Justice Holmes applied a concept of "reci-procity of advantage" that strongly parallels the equal-benefit princi-ple reflected in cases like Vanderbilt, Palmyra, and Paxson a centuryearlier.3 .54 In Mahon, the state cited Plymouth Coal Co. v. Pennsylvania,which upheld a law requiring mining companies to leave a pillar ofcoal at the edge of their subterranean coal fields.3 55 Justice Holmesdistinguished the case in part because the pillar-support law "securedan average reciprocity of advantage that has been recognized as ajus-tification of various laws." 356 In other words, although the pillar-sup-port law restrained every mining company's freedom to mine, on thewhole it enlarged such freedom. The law reduced each company'sincentive to dig quickly and force its competitors to assume a duty tosupport its excavations. 357 Justice Holmes had previously cited thereciprocity-of-advantage concept in Jackman v. Rosenbaum to uphold alaw that gave landowners the right to enter their neighbors' lands tobuild a dividing wall between the two properties. 358 This concept didnot apply in Mahon, obviously, because the coal company secured noadvantage in compensation for losing some of its mineral rights.

351 See id.352 See Lochner v. New York, 198 U.S. 45, 75 (1905) (Holmes, J., dissenting) ("I

strongly believe that my agreement or disagreement has nothing to do with the right of amajority to embody their opinions in law.").353 Mahon, 260 U.S. at 414.354 See discussion supra Part II.D.2.355 See Mahon, 260 U.S. at 415 (citing Plymouth Coal Co. v. Pennsylvania, 232 U.S. 531

(1914)).356 Id.

357 Justice Brandeis had other problems with Justice Holmes's opinion, but his dissentconceded the soundness of the reciprocity-of-advantage concept where public safety is notat issue. See id. at 422 (BrandeisJ., dissenting). Justice Brandeis readily acknowledged thatmandatory drainage laws and residential party-wall laws could pass muster on the groundthat they secured a reciprocity of advantage to affected owners. See id. (citing Jackman v.Rosenbaum Co., 260 U.S. 22 (1922); Fallbrook Irrigation Dist. v. Bradley, 164 U.S. 112(1896); Wurts v. Hoagland, 114 U.S. 606 (1885)).

358 SeeJackman, 260 U.S. at 30-32.

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Many commentators have wondered how Justice Holmes fash-ioned this concept of "average reciprocity of advantage."3 59 Althoughnineteenth-century state takings cases cannot answer this question de-finitively, they do provide a strong clue. Jackman and Mahon were bothhanded down in 1922, but the New York Supreme Court had de-scribed the same idea using the phrase "calculated for the commonbenefit of all" in Vanderbilt, the harbor-traffic case from 1827.360 Just

as the pillar-support law in Plymouth Coal increased every coal-miningcompany's coal take and protected its operations against ground col-lapse, so the harbor-traffic law in Vanderbilt increased every boatowner's and dock owner's chance to dock. Similarly, the party-walllawJustice Holmes upheld inJackman had the same justification as thefootpath laws upheld in Palmyra and Paxson. In each case, the im-provement enhanced every owner's home more than it restrained herfree use of it.361 Justice Holmes, the scourge of natural law, - 62 settledthe key questions in Mahon by applying doctrinal concepts first devel-oped to secure equal and natural property rights.

2. Utilitarian Takings Theory

Even stranger, Justice Holmes interlaced all this natural-right doc-trine with utilitarian property theory. Mahon is now described as thefirst case to describe regulatory takings law in terms of utilitarian inter-est balancing, a twentieth-century development. 363 The key passage ofproperty theory from Mahon reads as follows:

Government hardly could go on if to some extent values incident toproperty could not be diminished without paying for every suchchange in the general law. As long recognized, some values are en-joyed under an implied limitation and must yield to the policepower. But obviously the implied limitation must have its limits, orthe contract and due process clauses are gone. 364

This passage marks a fundamental shift from the property theoryat work in the natural-right-based decisions. The nineteenth-centurycases started with property rights; Justice Holmes starts with "values."Natural-right theory makes law's object the equal enjoyment of free-dom. Utilitarianism sets as its object maximization of social utility, or,

359 See, e.g., Lawson & Seidman, supra note 57, at 1098 (calling reciprocity of advantage"an obscure but powerful concept that has been seriously underanalyzed"). RobertBrauneis provides useful insights into Justice Holmes's development of this idea. SeeBrauneis, supra note 3, at 654-56.

360 See supra notes 176-85 and accompanying text.361 See supra notes 185-94 and accompanying text.362 See ALBERT W. ALSCHULER, LAW WITHOUT VALUES: THE LIFE, WORK, AND LEGACY OF

JUSTICE HOLMES, 26-27, 91-94 (2000).363 See, e.g., DUKEMINIER & KRIER, supra note 343, at 1140 ("Rules Based on Measuring

and Balancing").364 Pa. Coal Co. v. Mahon, 260 U.S. 393, 413 (1922).

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as Justice Holmes put it in another context, "the greatest good of thegreatest number. '3 65 Utilitarianism holds that social action is desira-ble whenever it increases the sum of the utility profiles of all membersof society.

Utilitarianism can dramatically change the object of regulationand takings law. In a natural-right account of regulatory takings law,free control and action over property is primary, the value of userights secondary. Property regulation seeks to increase the welfare ofall, but (at least as applied to property-on-property conflicts) natural-right property theory holds that the welfare of all consists of each per-son enjoying an equal share of freedom of action to use her own prop-erty as she wishes. Nuisance-control regulations restore owners whohave been stripped of use rights to their fair and equal share; reci-procity-of-advantage regulations enlarge that equal share when localconditions make it possible to do so. Still, both principles comple-ment each other in securing the free and equal use of property.Value plays a role in the natural-right approach, but merely a secon-dary role. It comes into play at the just-compensation stage, becausethe measure of damages is an objectively reasonable valuation of theproperty rights taken. More subtly, value may also become pertinentif there is an equal-advantage or reciprocity-of-advantage questionabout the law under challenge. A law works for the common benefitof all affected owners only if it enlarges the value of the rights thateach affected owner retains more than the value of the rights eachowner loses.

Utilitarian property theory reverses the priority between free useand value. As Justice Holmes's opinion suggests, value is primary, andfreedom is entirely derivative of value. Property consists of "value,"and this value is subject to "implied limitation s]" to make room forgovernment action.3 66 The government is presumed to have thepower to pursue any object that has public value for society at large.To secure public value, the government may increase, diminish, trans-fer, or even abolish private uses of property. In many versions of utili-tarianism, it does not matter whether useful social actions reduce thevalue of an individual owner's property; social action should be takenwhenever its gains outweigh the private value lost by the owner. Ifvalue is the basic building block in utilitarianism, the free use of prop-

365 Oliver W. Holmes,Jr., The Gas-Stokers'Strike, 7 Am. L. REV. 582, 584 (1873), reprintedin 1 THE COLLECTED WORKS OF JUSTrCE HOLMES 323, 325 (Sheldon M. Novick ed., 1995).But see David Luban, Justice Holmes and the Metaphysics ofJudicial Restraint, 44 DUKE L.J. 449,481-84 (1994) (doubting thatJustice Holmes was a utilitarian). For the classic expositionof the utilitarian principle to seek the "greatest good for the greatest number," seeJEREMyBENTHAM, AN INTRODUCTION TO THE PRINCIPLES OF MORALS AND LEGISLATION U.H. Burns &H.L.A. Hart eds., Methuen 1982) (1789).

366 See Mahon, 260 U.S. at 413.

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erty is derivative. An owner has a "right" to use his property freelyonly when the proposed social action increases the public's utility lessthan it decreases the value of his property and diminishes social wel-fare in other respects. An owner cannot demand compensation forevery drop in the value of his property because, as Justice Holmesmakes clear, government actions always affect the value of property.367

At one end of the spectrum, a Lockean utilitarian might track thenatural-right approach and conclude that most people, most of thetime, place a great deal of utility in the free use of their own property.On these generalizations, utilitarian interest balancing must discountthe social value of actions that scare, or in technical terms demoralize,other owners who stand to lose the free use of their properties be-cause of the precedents set by the actions. As Richard Epstein ex-plained this view in his analysis of Mahon: "[i]ndividuals normally-which is not to say invariably-act to advance their self-interest, whichincludes benefits to those close to them .... From that simple obser-vation stems the presumption that individuals should be allowed to dowhat they want. ' 368 Property regulation thus ought to avoid deprivingowners of what Epstein calls "liberty of action" except when truly nec-essary, because "each person's gains" from being left alone to use herproperty freely "carry through to the societal bottom line. 369

Understood in such Lockean terms, utilitarianism generates mostof the same prescriptions in takings law as does nineteenth-centurynatural-right theory. This similarity should come as no surprise.Many Founders believed that the free exercise of personal rights con-tributes more to social utility than any other good. 370 Applying such aperspective to Mahon, the coal company could include on its side ofthe balance not only its economic losses but also the social disloca-tions the Act would inflict when it upset other property owners' expec-tations that they could use their own property freely. Thesedemoralization costs would weigh far more heavily in the balance thanwould the coal company's lost value. On the other side of the bal-ance, such utilitarianism reserves independent judgment about

367 See id.368 Epstein, Erratic Holmes, supra note 170, at 877 (emphasis omitted).369 Id. Epstein cites John Locke's Second Treatise of Government to support his theoreti-

cal account. See id. at 877 n.11 (citingJOHN LOCKE, SECOND TREATISE OF GOVERNMENT 72(C.B. Macpherson ed., Hackett Publ'g Co. 1980) (1689)).370 See, e.g., CHIPMAN, supra note 65, at 36. As Nathaniel Chipman stated in an 1833

treatise:[T]he laws of nature, rightly understood, are found to aim, as well at thepromotion of the individual as the general interests-or rather the promo-tion of the general interest of the community, through the private interestsof the individual members;-for the general interest consists of an aggre-gate of the individual interests, properly estimated.

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whether a legislative action promotes public utility. Because this utili-tarianism insists that virtually all people derive large utilities from thefree use of property, it can measure legislative actions by how well theypromote utility consistent with this principle. Thus, Epstein thinksJustice Holmes was right to doubt the Pennsylvania legislature's safetyfindings, because the parties to the original land deeds "were in privityand had, by agreement, allocated the relevant risks amongthemselves."

3 7 1

At the other end of the spectrum, other utilitarian theories holdthat it is impossible to generalize human utility functions. Becausesuch theories cannot predict that confiscatory regulations lower utilityby demoralizing similarly situated owners, an owner has nothing tobalance on her side of the scales except her own economic losses. Nomatter how severe her losses, they probably will not weigh very heavilyagainst the benefits expected by society at large. This tendency existsin Jeremy Bentham's utilitarianism, which treats social welfare as thesum of the utility preferences of all members of society.3 72 The ten-dency is even stronger in theories, like John Dewey's, that combineutilitarianism with historicist theories like progressivism or pragma-tism. In these theories, the public interest transcends the sum of indi-vidual preferences; it is the expression of a historically evolvingcommunal rationality higher than the interests of any One individ-ual. 373 Because all such theories decline to hold that people placegreat utility in the free use of their property, they generate balancingtests that tilt sharply in the government's favor.

Justice Brandeis's dissent in Mahon illustrates this end of the utili-tarian spectrum. Justice Brandeis agreed with Justice Holmes that theCourt needed to balance public and private interests, but he insistedmore clearly than Justice Holmes that this balance needed to pit theindividual against the state-the coal company's economic lossesagainst the state's interest in protecting surface owners' safety. He in-sisted that "values are relative."3 74 The coal company lost economicvalue when the Kohler Act imposed a duty of support, but that loss ofvalue was relative to "the value of the whole property," mineral rightsand topsoil together, and to the interests of the public.3 75 If the legis-

"71 Epstein, Erratic Holmes, supra note 170, at 889.

:372 See BENTHAM, supra note 365, at 11-13; see alsoJJ.C. Smart, An Outline of a System of

Utilitarian Ethics, inJ.J.C. SMART & BERNARD WILLIAMS, UTILITARIANISM: FOR AND AGAINST 3,9-12, 30-57 (1973) (distinguishing between "act" and "rule" utilitarianism and endorsingact utilitarianism).

373 See, e.g., JOHN DEWEY, Liberalism and Social Action, in II JOHN DEWEY: TiHE LATE-RWORKS, 1925-1953, at 17-22 (Jo Ann Boydston ed., 1987) (reading British and Americansocial history to have produced a governing political ideology combining features ofBenthamite utilitarianism, English romanticism, and German progressive historicism).

374 Pa. Coal Co. v. Mahon, 260 U.S. at 393, 419 (1922) (Brandeis, J., dissenting).:375 See id.

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lature thought that the coal company threatened Mahon's and otherowners' safety, Justice Brandeis was not about to question the legisla-ture's judgment.3

76

3. Justice Holmes's Utilitarian Dilemma, and Mahon's AmbivalentLegacy

In Mahon, Justice Holmes took a position between these two ex-tremes, though much closer to Bentham and Dewey than to Locke.Like Justice Brandeis, Justice Holmes framed the takings question as aconflict between public and private interests. Unlike Justice Brandeis,however, Justice Holmes insisted on scrutinizing some property regu-lations aggressively. His opinion is most famous for announcing, un-helpfully, "that while property may be regulated to a certain extent, ifregulation goes too far it will be recognized as a taking. 3 77

Justice Holmes was quite confident that the Kohler Act went "toofar," but he had trouble explaining why. He first tried to tip the scalesin the coal company's favor by saying that the company had suffered amassive loss. For Justice Holmes, "the extent of the diminution" ofproperty values was severe. 3 78 Because he found that the Kohler Act"ma[d]e it commercially impracticable to mine coal.... the Act ha[d]very nearly the same effect for constitutional purposes as appropriat-ing or destroying" the right to mine for coal.379 But so what? Even ifthe coal company had lost all the value of its mineral rights, a utilita-rian could easily respond that Pennsylvania simply placed more utilityin public safety than the coal company placed in its lost rights.

Justice Holmes then tried to rig the public side of the balance bysuggesting there was hardly any public interest at issue. The Mahonlitigation arose out of a private suit, a bill in equity by homeowners toenforce the Act. °80 Justice Holmes suggested that public utility wasnot very high because it was only "the case of a single privatehouse."38 1 But, as he grudgingly recognized, the public interest canalways be a factor in an injunctive proceeding, and the coal companymade the public interest relevant as soon as it challenged the constitu-tionality of the Kohler Act.3 8 2 Justice Brandeis caught JusticeHolmes's dodge and made him pay for it,383 and Justice Holmes was

376 See id. at 417-19.377 Id. at 415.378 See id. at 413.379 Id. at 414.380 See id. at 412.381 See id. at 413.382 See id. at 413-14.383 See id. at 421 (Brandeis, J., dissenting) ("[T]o protect the community through in-

voking the aid, as litigant, of interested private citizens is not a novelty in our law .... Andit is for a State to say how its public policy shall be enforced.").

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forced to acknowledge that "the case has been treated as one in whichthe general validity of the [Kohler Act] should be discussed."38 4

One way or another, then, Justice Holmes needed to explain whythe Kohler Act made for bad policy-why it went "too far." Heneeded to explain why the public did not have any "real" social valuein shifting the risk of subsidence from Mahon and other homeownersback to the coal company. Much ink has been spilt trying to decipherJustice Holmes's explanation. William Michael Treanor, for example,argues that Justice Holmes, while generally deferential to propertyregulations, was willing to strike down acts like the Kohler Act on theground that they were arbitrary and the product of bad politicalprocesses. 385 Robert Brauneis suggests that Justice Holmes was con-cerned that the Kohler Act unfairly disrupted coal companies' prop-erty expectations, and he doubts that Justice Holmes was asdeferential to legislatures as other progressives like Justice Bran-deis.386 In private correspondence, Justice Brandeis offered a simplerexplanation. He speculated to a friend thatJustice Holmes was goingsenile.

38 7

Whatever motivated Justice Holmes, the striking fact is that hedrew on natural-right legal principles-intermediate scrutiny, nui-sance control, and reciprocity of advantage-to translate his frustra-tions into legal arguments. The only doctrinally plausible way hefound to explain why the Kohler Act had low utilitarian social valuewas to say that it did not advance the public interest as measured byconstitutional doctrines fashioned to secure natural rights.

Needless to say, Justice Holmes's reasoning was bound to confusefederal regulatory takings law no matter how it developed. If the fed-eral courts had remained sympathetic to natural-right property the-ory, they would have needed to lift the natural-right doctrines fromJustice Holmes's opinion while discrediting his rendition of utilitarianproperty theory. If, as happened in reality, the courts continued toshift toward utilitarianism, they would need to embrace the favorabletheory in Mahon but discredit the result, the discussion about reci-procity of advantage, and the heightened scrutiny. These tensions inlaw and theory would remain as long as natural-right and utilitariantheory competed for influence in the federal bench.

-384 Id. at 414.

385 See Treanor, supra note 283, at 859-60.

'386 See Brauneis, supra note 3, at 642-60; Robert Brauneis, Treanor's Mahon, 86 GEo.

L.J. 907, 920-24 (1998).387 See Melvin 1. Urofsky, The Brandeis-Frankfurter Conversations, 1985 Sup. C. REV. 299,

321 (noting that "[h]eightened respect for property has been part of Holmes' growingold" and that "intellectually [Holmes] may try to rid himself of undue regard for propertybut emotionally he can't").

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E. Euclid: Deference in Regulatory Takings Law

If Mahon was a mixed bag for the nineteenth-century approach totakings, the next case was an outright setback. In Village of Euclid v.Ambler Realty Co., the Supreme Court rejected a series of serious consti-tutional property-rights challenges to modern zoning.38 Practically,Euclid's stakes were staggering. Modern zoning was just coming intoits own at the time, and virtually all American cities use it now. 3 9 Doc-trinally, the Court's opinion in Euclid did more than any other deci-sion to discredit the natural-right approach to regulatory takings.Euclid's scheme had serious constitutional problems in the nine-teenth-century framework. When the Court cited natural-right princi-ples to uphold Euclid's scheme, it sent a strong message that theseprinciples no longer needed to be taken seriously.

1. Euclid's Zoning Scheme

Euclid is a sixteen square-mile suburb on the east side of Cleve-land. 390 At the time of the litigation, the village was largely undevel-oped farm land, with only a few thousand residents. 391 Ambler Realtyowned sixty-eight acres of vacant and undeveloped land on the south-west side of town, immediately east of the Cleveland border.392 Thecompany's land was an 1800-by-1950 square-foot parcel; one of the1800-foot sides ran along Euclid Avenue, the busiest street in town.39 3

The trial court found that most of the land was likely to be convertedto industrial uses but that the land along Euclid Avenue was likely tobe converted to retail stores and other commercial uses. 394

Euclid's zoning ordinance drastically changed Ambler Realty'splans. The ordinance zoned the first 620 feet off of Euclid Avenue forone- and two-family dwellings only. It zoned the next 130 feet for one-and two-family dwellings and also apartments, hotels, churches,schools, and other similar noncommercial uses.39 5 The ordinance leftthe 1050 feet farthest from Euclid Avenue free for industrial use.396

The trial court found that, but for the ordinance, the company proba-bly would have converted the land along Euclid Avenue into

388 272 U.S. 365 (1926) [hereinafter Euclid].389 See Robert C. Ellickson, Alternatives to Zoning: Covenants, Nuisance Rules, and Fines as

Land Use Controls, 40 U. C-i. L. REv. 681, 692 (1973) (noting that, as of 1973, more than97% of American cities with populations over 5,000 residents relied on zoning).

390 See Ambler Realty Co. v. Vill. of Euclid, 297 F. 307, 308-09 (N.D. Ohio 1924) [here-inafter Ambler Realty].

391 Id. at 309.392 See id.393 See id.394 See id.-195 See Vill. of Euclid v. Ambler Realty Co., 272 U.S. 365, 380-82 (1926).396 See id. at 383.

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storefronts and other commercial uses and converted most of the restof the restricted 750-by-1950 square-foot area to industrial uses. 397 Be-cause the ordinance stripped the company of valuable industrial- andcommercial-development rights, the value of the restricted lotsdropped from $10,000 per acre to $2500 per acre,398 and Ambler lostseveral hundred thousand dollars.3 99

2. The District Court Opinion: The Distinction Between Police Powerand Eminent-Domain Power

Judge Westenhaver, the district courtjudge, applied natural-righttakings principles to strike down the ordinance. His opinion suggestshow regulatory takings law could have developed after Mahon if fed-eral judges had remained sympathetic to natural-right property the-ory. The judge began by describing property in sweeping terms. In itsbriefs, the Village of Euclid argued for what is now the modern view,"that so long as the owner remains clothed with the legal title [toproperty] and is not ousted from the physical possession thereof, hisproperty is not taken.' ' 4 0 Judge Westenhaver rejected this view: "Theright to property, as used in the Constitution, has no such limitedmeaning. As has often been said in substance by the Supreme Court:'There can be no conception of property aside from its control anduse, and upon its use depends its value. '"'40 1 Like James Madison,Zephaniah Swift, and many nineteenth-century state judges, JudgeWestenhaver conceived of property as an extension of personalfreedom.

Judge Westenhaver then held that the power to "regulate" prop-erty was limited by the principles he thought justified "property." TheVillage of Euclid made another modern argument when it suggestedin its briefs that mere "regulations" never trigger eminent-domain lim-itations. "[S] ince the ordinance in question does not take away plain-tiffs title or oust it from physical possession," the village argued, "thepower of eminent domain has not been exercised, but ... the policepower has been. '4

02 Judge Westenhaver rejected this argument as

well: "Obviously, police power is not susceptible of exact definition.... And yet there is a wide difference between the power of eminentdomain and the police power; and it is not true that the public welfareis a justification for the taking of private property for the generalgood. ' 411 To distinguish between these two powers, Judge Westen-

397 See Ambler Realty, 297 F. at 309.398 See Euclid, 272 U.S. at 384.

399 See Ambler Realty, 297 F. at 309.400 Id. at 313.401 Id. (quoting Block v. Hirsh, 256 U.S. 135, 165 (1921)).402 Id.403 Id. at 314.

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haver relied on the principles discussed in the state cases studied inPart II. He drew on concepts of intermediate scrutiny and harm pre-vention in announcing that "[a] law or ordinance passed under theguise of the police power ... can be sustained only when it has a realand substantial relation to the maintenance and preservation of thepublic peace, public order, public morals, or public safety."'' 4 4 Sepa-rately, Judge Westenhaver invoked and applied the "average reciproc-ity of advantage rule" that Justice Holmes had applied in Jackman andMahon.

405

Ultimately, Judge Westenhaver concluded that Euclid's zoningscheme was unconstitutional because "it takes plaintiffs property, ifnot for private, at least for public, use, withoutjust compensation" and"is in no just sense a reasonable or legitimate exercise of policepower. '40 6 Substantively, he thought "that the true object of the ordi-nance in question is to place all the property in an undeveloped areaof 16 square miles in a strait-jacket," and that "[t]he only reasonableprobability is that the property values taken from plaintiff and otherowners similarly situated will simply disappear. 4 °7

3. Pollution Control

Although Judge Westenhaver's opinion distinguished betweenthe police power and eminent-domain power, the opinion appliedthat distinction broadly and conclusorily. The judge conceded thatmany of the zoning restrictions might be valid by themselves, but hedid not sift the wheat from the chaff because he thought the validregulations were inseparable from the takings. 4

118 Still, read closely,

Judge Westenhaver's opinion illustrates when zoning secures andwhen it invades natural property rights.

Under a natural-right analysis, zoning may serve an importantfunction by protecting delicate uses of property from heavy industry.The Supreme Court approved of this function in Hadacheck. Pollutioncontrol gives cities a rationale for cordoning off smokestack indus-tries, garbage dumps, and other noxious uses of property from familyhomes, apartments, and light commercial uses like office buildingsand retail stores. However, at least in neighborhoods that lack a uni-form pattern of land use, pollution control does not give cities licenseto segregate light commercial uses from residential buildings, or tozone apartments, multiple-family homes, and single-family homes

404 Id.405 See id. at 315 (citingJackman v. Rosenbaum, 260 U.S. 22 (1922)); Pa. Coal Co. v.

Mahon, 260 U.S. 393 (1922).406 Ambler Realty, 237 F. at 317.407 Id. at 315-16.408 See id. at 316.

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apart from one another. Retail stores and office buildings might benoisier and busier than apartments, and apartments more so thanresidences. In general, however, such noise and traffic do not becomeso egregious that they constructively evict residential owners fromtheir properties. Homeowners may not like the sounds of cars park-ing, doors slamming, and people bustling, but these disturbances donot preclude them from enjoying their houses as homes. The Euclidordinance was problematic in part because it zoned more of AmblerRealty's lots into residential-only uses than it needed in order to con-trol pollution.

4. Aesthetic Control

Judge Westenhaver also noted that the Euclid zoning scheme had"an esthetic purpose; that is to say, to make this village develop into acity along lines now conceived by the village council to be attractiveand beautiful. '40 9 Zoning has been used even more aggressively sinceEuclid's time to arrange and beautify the appearances of towns andcities.41

11 Judge Westenhaver was confident that such beautification re-strictions could "not be done without compensation under the guiseof exercising the police power. '" 4 1 1

The Euclid zoning scheme thus raised the issue that the SupremeCourt had finessed in the billboard cases: whether a locality could en-force a beautification scheme as a police regulation. Judge Westen-haver said no. 4 12 Beautification plans restrain owners' free actionover their own property because they enforce dainty or delicate usepatterns across an entire city. Again, one can express this suspicion bysaying that unsightly houses do not physically invade neighbors' prop-erty, but that is a technical way to make a more substantive point. AsPart III.C explained, because beauty is in the eye of the beholder, aes-thetic legislation tends to freeze the use of property and to encouragewhat Judge Westenhaver called "class tendencies."' 4' 3 People usuallydo not pursue the beautiful until they have earned enough money totake care of basic life necessities. In Judge Westenhaver's words,"[the true reason why some persons live in a mansion and others in ashack ... is primarily economic. It is a matter of income and wealth,plus the labor and difficulty of procuring adequate domestic ser-

409 Id.410 See, e.g., State ex rel. Stoyanoffv. Berkeley, 458 S.W.2d 305 (Mo. 1970).411 Ambler Realty, 297 F. at 316.412 See id. at 315 (distinguishing St. Louis Poster Adver. Co. v. City of St. Louis, 249

U.S. 269 (1919), and Thomas Cusack Co. v. City of Chicago, 242 U.S. 526 (1917), becausethe Illinois and Missouri Supreme Courts were more hostile to zoning ordinances than theU.S. Supreme Court was to local billboard ordinances from their states). For the billboardcases, see supra Part III.C.

413 See Ambler Realty, 297 F. at 316.

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vice. '41 4 Taking these factors together, Judge Westenhaver thoughtthe aesthetic tendencies of Euclid's zoning scheme would not securefree property use but rather would "classify the population and segre-gate them according to their income or situation in life. '4 15

5. Zoning and the Locality Rule

Zoning is also useful when and to the extent that it enforces theprinciples of the locality rule in nuisance law. When most of the own-ers in a neighborhood dedicate their lands to similar industrial uses,the locality rule protects them all from nuisance liability by sharplyincreasing the degree of interference a plaintiff must show before shecan establish a nuisance. 4 16 Conversely, when most of the owners inthe neighborhood dedicate their lands to residential uses, the localityrule increases the bite of nuisance law, protecting the owners againstinterferences that might be considered trivial or insubstantial in amixed-use neighborhood. 4 17

It may seem strange that an approach based on avowedly perma-nent laws of nature could generate a legal system in which an ownerreceives different levels of legal protection for the same land use indifferent neighborhoods. Nevertheless, the natural-right approach ispractical and prudential. It prescribes whichever land-use arrange-ment most enlarges owners' freedom of action. Owners have morefreedom to use their land as they see fit if they reside next to like-minded neighbors. Homeowners can still put their homes to residen-tial uses even if they are forced to tolerate nearby business and restau-rant traffic, but most residents would prefer to follow stronger normsfor peace and quiet with like-minded neighbors. Because manufactur-ing is incompatible with so many other forms of land use, industrialparks and' zones dramatically increase the freedom to manufacture.This principle aggravated Ambler Realty's complaint. Euclid's zoningrestrictions split in two what the company had planned to sell as asingle industrial-use park. When the restrictions outlawed Amblerfrom using forty percent of the land for industrial uses, they de-creased the value of the other sixty percent for industrial uses. 4 18

414 Id.

415 See id.416 See, e.g., Gilbert v. Showerman, 23 Mich. 448 (1871); see also EPSTEIN, TORTS, supra

note 174, § 14.9, at 374 ("The locality ... performs a useful sorting function by exemptingfrom liability nuisances that are appropriate to particular districts.").

417 See, e.g., Robinson v. Baugh, 31 Mich. 290 (1875).

418 See Vill. of Euclid v. Ambler Realty Co., 272 U.S. 365, 382-84 (1926); see also Rich-ard A. Epstein, A Conceptual Approach to Zoning: What's Wrong with Euclid, 5 N.Y.U. ENVrL.L.J. 277, 287 (1996) (noting that the land's value dropped to about $200,000 from$700,000).

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Furthermore, zoning enforces the locality principle more effec-tively than nuisance law. Legislation can provide certainty and preci-sion that nuisance law cannot. In Alger, Chief Judge Shaw defendedthe Boston Harbor boundary laws because "certainty and precisioncan only be obtained by a positive enactment, fixing the distance,within which the use shall be prohibited as noxious, and beyondwhich it will be allowed, and enforcing the rule thus fixed, by penal-ties." 419 Zoning can serve the same function. If a neighborhood has"tipped" to the point where one land use predominates, local legisla-tion can increase certainty and reduce litigation by confirming theshift and defining the boundaries of the "uniform" neighborhood. 420

At the same time, any legislative version of the locality rule breaksdown if the legislative plan does not provide nonconforming ownerssomewhere to relocate. If a city zones manufacturers out of a residen-tial district, its zoning plan must provide enough industry-only ormixed-use areas to ensure that the zoning restriction is not a disguisedprohibition on manufacturing. Of course, practical complicationsmay arise, especially when small towns in a large metropolitan areaexclude manufacture and industry and count on other towns to hostthem. Even so, if a city establishes a residential-only zone, one mayask whether it has left enough mixed-use and industry- or commerce-only neighborhoods for other land uses. In Euclid, for instance,JudgeWestenhaver was extremely suspicious of Euclid's zoning scheme be-cause it made no provision to expand highway access. 421

6. Undeveloped Property

The most crucial issue, however, relates to the regulation of un-developed property. This is the feature that most differentiates thenatural-right approach from modern zoning. Euclidean zoning oper-ates on the assumption that owners do not have "property" worthy ofthe name until zoning regulations give them property in the land usespermitted in the neighborhood. By contrast, as the Hadacheck discus-sion in Part III.B illustrates, the natural-right approach holds thatowners have property in the full range of use potential in their land-before they dedicate it to any one use, and before any zoning boardzones the land for a limited number of permissible uses. That rightlimits how undeveloped land may be zoned consistent with natural-right principles. It is difficult to say that one land use poses a "real"threat to another when one of the two properties does not yet have adistinct use.422

419 Commonwealth v. Alger, 61 Mass. (7 Cush.) 53, 97 (1851).420 See, e.g., RESTATEMENT (SECOND) OF TORTS §§ 821B(2)(b), 828(b) (1979).421 See Ambler Realty Co. v. Viii. of Euclid, 297 F. 307, 316 (N.D. Ohio 1924).422 See discussion supra Part II.B.4.

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Similarly, it is virtually impossible to conclude that a zoning plansecures equal benefit or an average reciprocity of advantage to allowners when much or most of the affected land is undeveloped.There is simply not enough information to determine whether theplan will preserve or enlarge every affected owner's preferred landuse. From time to time in recent years, the Supreme Court has sug-gested that zoning does secure an average reciprocity of advantage, 42 3

but these suggestions have only diluted the principle so much that it isnow meaningless. Judge Westenhaver viewed zoning quite differentlyand emphasized that Ambler Realty's land was undeveloped. 424 Con-sidering the reciprocity-of-advantage issue, he concluded:

It is a futile suggestion that plaintiff's present and obvious loss frombeing deprived of the normal and legitimate use of its propertywould be compensated indirectly by benefits accruing to that landfrom the restrictions imposed by the ordinance on other land. It isequally futile to suppose that other property in the village will reapthe benefit of the damage to plaintiff's property and that of otherssimilarly situated .... [T] he property values [lost] are either dissi-pated or transferred to unknown and more or less distantowners.

425

7. The Supreme Court's Opinion and Its Legacy

One may fairly question the theories of property and politics onwhich Judge Westenhaver relied. But his reservations about the scopeand purposes of Euclid's zoning laws directly follow from those theo-ries. His opinion may also seem aggressive because he second-guessedthe motives behind and the effects of the Euclid zoning plan. Inter-mediate scrutiny, however, was part and parcel of the natural-rightproject for property regulation. In Alger, when Chief Judge Shaw de-ferred to the Massachusetts legislature's harbor-line regulations, heemphasized that he was writing an exceptional case. He warned thatthe whole edifice of constitutional takings principles would collapse ifsuch deference ever extended to property regulations on dry land.42 6

Judge Westenhaver saw this danger vividly. He learned from sev-eral decisions in which the Supreme Court had upheld rent-controllaws. These laws were supposed to be two-year "temporary expedi-ent[s]" in response to housing shortages created by World War I, butthey remained in effect seven years after the war and showed no signs

423 See, e.g., Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 133-35 (1978); id.

at 139-40 (Rehnquist, J., dissenting).424 See Ambler Realty, 297 F. at 309-10, 315-16.

425 Id. at 315-16.426 See supra notes 274-75 and accompanying text.

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of going away. 42 7 Judge Westenhaver concluded that it is better "towithstand at the very beginning every invasion of a constitutional guar-anty of life, liberty, or property. '42

Even more on point, Euclid presented many of the issues litigatedin Buchanan v. Warley.4"29 In that case, the Supreme Court had invali-dated a zoning scheme designed to segregate blacks and whitesthroughout Kentucky.430 The Court delivered several sweeping state-ments about the rights to buy and use property43 1 and about thegrounds a state could cite to regulate those rights in zoning law. 4"3 2 InJudge Westenhaver's estimation, "no gift of second sight [was] re-quired to foresee" that if race-based zoning had been upheld inBuchanan, "its provisions would have spread from city to city through-out the length and breadth of the land. '"4 33 Judge Westenhaver fore-saw that Euclidean zoning threatened to become a tool of anti-immigrant, anti-growth, and class-based tendencies. 434

In contrast, the Supreme Court was less concerned about zon-ing's potential for abuse than about the fact that zoning had become astaple in local land-use regulation in many states.435 Justice Suther-land, one of the Court's most articulate defenders of natural propertyrights, 4 36 authored an opinion upholding Euclid's zoning schemeunder traditional police-power principles. Nowhere in his opiniondid he confront the problems aesthetic zoning posed for the free ex-ercise of property rights. Justice Sutherland also held that the city of

427 See Ambler Realty, 297 F. at 311 (citing Block v. Hirsh, 256 U.S. 135 (1921); Marcus

Brown Holding Co. v. Feldman, 256 U.S. 170 (1921); Edgar A. Levy Leasing Co. v. Siegel,258 U.S. 242 (1922)).428 Id. (citing Boyd v. United States, 116 U.S. 616, 635 (1886)).429 245 U.S. 60 (1917).430 See id. at 81-82.431 See id. at 74 ("Property is more than the mere thing which a person owns. It is

elementary that it includes the right to acquire, use, and dispose of it. The Constitutionprotects these essential attributes of property.").432 See id. at 74-75. The Court stated:

The disposition and use of property may be controlled in the exercise ofthe police power in the interest of the public health, convenience, or wel-fare. Harmful occupations may be controlled and regulated. Legitimatebusiness may also be regulated in the interest of the public. Certain uses ofproperty may be confined to portions of the municipality other than theresident district, such as livery stables, brickyards and the like, because ofthe impairment of the health and comfort of the occupants of neighboringproperty.

Id.43- Ambler Realty, 297 F. at 313.434 See id.4-35 See Vill. of Euclid v. Ambler Realty Co., 272 U.S. 365, 390 (1926); Charles M. Haar

& Michael Allan Wolf, Euclid Lives: The Survival of Progressive Jurisprudence, 115 HARV. L.REV. 2158, 2191-92 (2002).436 See, e.g., HADLEY ARKES, THE RETURN OF GEORGE SUTHERLAND: RESTORING A JURIS-

PRUDENCE OF NATURAL RiGhcrs 20-24 (1994).

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Euclid had ample police power to anticipate and control nuisances. 437

Judge Westenhaver had doubted that Euclid's scheme had a real con-nection to any pollution-control ends, and he was concerned that thescheme restrained the development of undeveloped property.438 Jus-

tice Sutherland brushed aside these doubts, on the ground that Euclidcould include "a reasonable margin" for erring on the side of control-ling industry "to insure effective enforcement. '43 9 Justice Sutherlandrecognized that Euclid's zoning scheme strained the pollution-controlrationale when it purported to segregate apartments from standalonehouses.440 After canvassing state precedents, however, Justice Suther-land chose to defer to the findings of zoning experts. He deferred toexpert findings that apartments inflicted nuisances on standalonehomes because any apartment can act as a "mere parasite" on the air,open spaces, and scenery available in residential neighborhoods. 44 1

Justice Sutherland's opinion for the Court bowed to the experts'findings more than a natural-right conception of the police power

could allow. He faithfully restated the case for natural-right-based reg-ulation, but no one takes his restatement seriously anymore. Whenthe Court turned a blind eye to the discrepancies between zoning andnineteenth-century conceptions of the police power, it sent a strongmessage that zoning was unproblematic. Euclid is now understood, inone leading casebook's characterization, "as a generous endorsementof social engineering in the name of public health, safety, and wel-fare. 44 2 The Supreme Court cites Euclid routinely as proof that it canuphold land-use regulations promoting health, safety or welfare, evenwhen the regulations "destroy[ ] or adversely affect[ ] recognized realproperty interests. '443 This deference seriously discredited the case

for constitutional takings principles.

F. Miller v. Schoene, Public Necessity, and the Embrace ofUtilitarian Property Theory

The final blow came in Miller v. Schoene, the "cedar rust fungus"case.4 44 Miller v. Schoene applied the same utilitarian property theoryas Justice Brandeis did in Mahon, without any of Mahon's complica-tions or distractions. Miller v. Schoene now stands for the principle thatregulations pass muster whenever the law under review increases soci-

437 See Euclid, 272 U.S. at 387-88.438 See Ambler Realty, 297 F. at 314-16.439 Euclid, 272 U.S. at 388.440 See id. at 388-90.441 See id. at 390-94.442 DUKEMINIER & KRIER, supra note 343, at 1010.443 See, e.g., Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 125 (1978) (citing

Euclid).444 276 U.S. 272 (1928).

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ety's utility more than it diminishes the economic value of the affectedowners' property.44 5 This holding conflated police power with emi-nent-domain power and undermined any principled constitutionaldistinction between the two.

1. Cedar Rust Fungus and Other Weed- and Pest-Control Laws

Miller v. Schoene arose out of a conflict between apple- and cedar-tree owners in Virginia. Wild cedar trees seriously threatened the Vir-ginia apple-growing industry because they carried a fungus calledcedar rust, which is harmless to cedar trees but deadly to appletrees. 446 To control cedar rust, Virginia enacted a statute deeming tobe a public nuisance any cedar tree carrying the cedar rust fungus. 447

The statute authorized the state entomologist to inspect cedar treesfor the fungus when requested to do so by ten freeholders in the localcounty. 4 48 If the entomologist found that cedar trees were harboringthe fungus and were within two miles of any apple orchard, he wasrequired to order the owner to cut down the trees and destroythem. 44" The Virginia law followed the same inspect-and-destroyscheme as many other turn-of-the-century agricultural laws protectingagricultural interests from pests, weeds, and animal diseases. 45 1

The Virginia Supreme Court rejected the constitutional chal-lenges to the cedar rust law. 45 1 It cited as controlling precedent itsdecision in the 1920 case Bowman v. Virginia State Entomologist.452 Bow-man followed the same approach that the U.S. Supreme Court used inCusack, St. Louis Poster Advertising, and Euclid to uphold billboard con-trols and zoning: cite traditional nuisance-control principles, but thendefer to the legislature to explain away any tensions between thoseprinciples and the law under review. The Bowman court declared thatthe public may regulate to protect not only "the safety, health, andmorals of the people, but also, under certain circumstances, . . . theprotection of property."453 At the same time, the court warned, "everypossible presumption is to be indulged in favor of the validity of astatute." 454 On that basis, the Bowman court deferred to the Virginia

445 See, e.g., Penn Cent., 438 U.S. at 125-26 (citing Schoene, 276 U.S. at 279).446 See Schoene, 276 U.S. at 277-78.447 Miller v. State Entomologist, 135 S.E. 813, 814 n.1 (Va. 1926).448 Id.

449 Id.450 See Bowman v. Va. State Entomologist, 105 S.E. 141, 145-47 (Va. 1920) (citing ex-

amples of laws passed by the U.S. Congress and nine states).451 Miller, 135 S.E. at 814-15.

452 See id. (citing Bowman as controlling precedent).

453 Bowman, 105 S.E. at 145.454 Id. at 147.

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legislature's findings that apple growing was affected with a public in-terest and that cedar rust fungus constituted a public nuisance. 455

The Virginia Supreme Court leaned too heavily on judicial defer-ence and interbranch comity. The property-regulation principles theBowman court cited did notjustify treating the cedar rust law as a "reg-ulation." Indeed, the court recognized that, at common law, thecedar trees would not have constituted a nuisance, public or pri-vate. 456 Still, the court asserted, "whatever constitutes a real menaceto [the agricultural] supply may be legitimately declared by statute tobe a public nuisance and abated as such, although it may not havebeen such a nuisance ... at common law."'457

2. Changing Circumstances in Natural-Right ConstitutionalInterpretation

The Virginia Supreme Court glossed over a crucial ambiguity inthe idea of "changing circumstances." Natural-right-minded juristsfreely admitted that new conditions might require new laws. Whenthey spoke of the principle of changed circumstances, however, theymeant something far narrower than what is usually understood now.Constitutional provisions expressed broad and permanent declara-tions of moral principle. Although factual conditions could and oftendid change, the ends of government did not. Judges and legislatorswere supposed to adapt positive laws to changing real-life conditions,always to secure permanent moral principles as well as possible. 458 Inpresent-day legal thought, by contrast, "changed circumstances" argu-ments allow legislators to adapt laws not only when times change thefactual conditions that need to be regulated, but also when the peoplechange their basic opinions about how the government should regu-late property.459 The former approach presumes that lawmakers willapply permanent equal-rights principles to a changing world; the lat-ter frees lawmakers to experiment with equal-rights principles, pro-gressivism, social utilitarianism, or some other political theory thatmight capture the public's fancy.

This distinction makes a huge difference in understanding Millerv. Schoene. According to the narrower view, the conflict was neverabout "apples versus cedars." Within a scheme of equal rights, theobject was to preserve to every affected owner an equal share of free-

455 See id. at 145, 147-48.456 Id. at 144.457 Id. at 145.458 See supra note 105 and accompanying text. For a famous defense of this view, see

Justice Sutherland's dissent in Home Bldg. Loan Ass'n v. Blaisdell, 290 U.S. 398, 448(1934) (Sutherland, J., dissenting).459 See, e.g., PruneYard Shopping Ctr. v. Robins, 447 U.S. 74, 89, 92-93 (1980) (Mar-

shall, J., concurring).

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dom to put her own property to her own preferred use. The Virginialegislature could still try to regulate the conflict even if traditional nui-sance law could not. Still, if and when the legislature tried a new ap-proach, it was bound by equal-rights principles.

3. Regulating Cedar Rust Consistent with Natural-Right Principles

As it turned out, the cedar rust was not a "nuisance" in the tradi-tional sense. The fungus was a natural condition on the land. Theowners of the cedar trees did not put the trees, or the rust fungus, ontheir property. In general, nuisance law incorporates act and causa-tion requirements because it holds owners responsible for how theyuse their properties. The Virginia Supreme Court recognized asmuch in Bowman when it cited precedent holding that a harmful con-dition is not a "nuisance" unless it is proximately caused by some actor omission of the defendant. 461 1 Since the cedar trees grew naturallyon Miller's property, he could not be held responsible under com-mon-law nuisance principles for damage they might inflict on neigh-boring property. Richard Epstein has concluded that Miller waswrongly decided on similar grounds.4 6 1

This conclusion does not make it impossible to "regulate" thecedar rust problem under natural-right principles, however. If theCourt had declared the cedar rust law unconstitutional, it would havepreserved conditions that were "natural" in a low, Hobbesian sense.The law would have restrained Miller and his apple-growing neigh-bors from using fraud or force on each other, but it would have leftthe apple growers exposed to a huge risk. Striking down the cedarrust law would also have preserved conditions that were "natural" inthe sense that the Legal Realists meant when they lampooned natural-law theory. The law would have stayed within the traditional and cus-tomary confines of the common law of nuisance, even if those tradi-tions and customs applied imperfectly to the problems posed by cedarrust fungus. 462 It was still possible, however, that property legislationcould create conditions that were "natural" in the sense understoodby Founders like James Wilson. 4 63 Such legislation could adjustMiller's and his neighbors' property rights so that all could pursuetheir own preferred property uses, no one would be inclined to fightover property, and all would have the greatest realistic chance of en-tering into society with one another.464 To secure such "natural" con-

461) See Bowman, 105 S.E. at 144 (citing Roberts v. Harrison, 28 S.E. 995 (Ga. 1897)(excluding dangerous natural conditions on land from the reach of nuisance, on theground that nuisances must be proximately caused by the defendant actor's omission)).

461 See EPSTEIN, TAKINGS, supra note 32, at 113-14.462 See CASS R. SUNSTEIN, TIE PARTIAL CONSTITUTION 51 (1993).463 See discussion supra Part i.B.464 See discussion supra Part l.A-C.

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ditions, Virginia legislators could step outside the confines ofnuisance common law to resolve this conflict, while always judgingtheir results by natural-right principles.

The cedar rust law probably could not have been saved as a regu-lation securing an equal and reciprocal advantage. Still, it is conceiva-ble that some regulations of natural hazards might pass muster underthis category. For instance, even if the owners of swamps are not re-sponsible for mosquitoes and other health threats in their swamps, ascontemplated by traditional rules of causation and nuisance, a lawforcing each to drain his respective portion of the swamp might wellsecure to all the mutual benefit of freedom from disease. Some of theweed- and pest-control laws in other states could have been justifiedon this basis. If virtually all residents in a given locale grow a few cropsthreatened by one weed, all would benefit enough from the controllaw to assume a duty to watch for the weed on their own lands. Even ifdifferent crops were threatened by different weeds, the controlscheme could still secure a common benefit to all owners if it pro-tected each from weeds especially dangerous to farming. However, itis not likely that the cedar rust law could have passed muster on thisbasis. The neighbors received no new rights to make up for the cedartrees they chopped for the apple growers.

Nevertheless, it would still have been possible to adjust the cedarrust law to make it "regulate" the fungus conflict as a harm-preventionmeasure. Even if Miller committed no nuisance, the cedar rust in hiscedars still posed a "harm" to the apple groves in the natural-rightsense of the word. Miller might not have been negating his neigh-bors' right to grow apples, but the fungus was. If the law could notregulate this harm by analogy to nuisance, it could analogize to thelaw of necessity instead. Cedars tended to grow wild on rural grazinglands or homes; they were not grown for commercial purposes, andthey were useful only as decoration. 465 Assuming that Miller was arural ranch or homeowner, the cedars may have provided him withincidental benefits, but he could still enjoy the main use of his prop-erty without them. At the same time, chopping down the cedarswould leave his apple-growing neighbors with what James Madisonhad called "the like advantage" over their properties. 466 Miller shouldhave ceded "property" in the cedars to save his neighbors' main use oftheir lands. Thus, he should also have ceded his right to exclude theapple growers from entering his land to destroy infested cedarsthemselves.

465 See Miller v. State Entomologist, 135 S.E. 813, 814 (Va. 1926); Bowman, 105 S.E. at

148.466 See 14 THE PAPERS OF JAMES MADISON, supra note 75, at 266 (emphasis omitted).

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Seen in this light, the Virginia Supreme Court should have ana-lyzed the cedar rust law as the New Jersey Supreme Court had ana-lyzed the fire-control law under challenge in American Print Works.The necessity in Miller v. Schoene was less stark than the necessity inAmerican Print Works. Miller could give up his cedars without losingthe primary use of his land, while the New York City fire in AmericanPrint Works was bound to destroy completely one of the two parties'property.467 Still, the cedar rust law could be judged by whether itregulated the parties' property rights by ordering how the apple-groveowners exercised their natural right of necessity.

A few subtle changes would have saved the law. The law couldnot, and should not, have made Miller responsible for clearing thecedars free of charge. It could have authorized local apple growers toenter and destroy infested cedars once the state entomologist hadfound an infestation. State officials could have chopped down thetrees and billed the apple growers. If the legislature was bent on mak-ing Miller chop down the infested trees on his property, it should haveforced the apple-grove owners to compensate Miller for doing theirwork, or perhaps itself compensated Miller. The latter possibilityshows how closely the police power approaches the eminent-domainpower in cases involving necessity. Still, any of these laws would havecaptured the distinct character of the "harm" generating the conflictand "regulated" that harm consistent with natural-right propertyprinciples.

That said, Miller v. Schoene is often assumed to present an irrecon-cilable conflict between the cedars and the apple groves.468 This por-trayal is misleading because the conflict was between the owners andnot their trees. From this perspective, the conflict was easy to regu-late, because home- and pasture-owners could relinquish "property"in the cedars without losing the primary uses of their lands. Still, aswill be seen, the U.S. Supreme Court did present the case as an all-or-nothing conflict between the cedar trees and apple trees, and this ren-dition plays a significant role in constitutional law.469 The followingassumes, then, that Miller owned and operated a commercial cedargrove, and that there were about as many cedar groves as apple grovesthroughout the local region.

In this rendition, the natural-right approach cannot say in anyprincipled way whether the cedar trees pose "harm" to the apple trees.Cedar rust is too unusual a pollutant to draw any clear conclusions.

467 See supra notes 201-05 and accompanying text.468 See, e.g., Louis MICHAEL SEIDMAN & MARK V. TUSHNET, REMNANTS OF BELIEF: CON-

TEMPORARY CONSTITUTIONAL ISSUES 26-27 (1996); SUNSTEIN, supra note 462, at 54;Michelman, supra note 22, at 1198-99.469 See discussion infra Part I1I.F.4.

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Because the fungus carries with the wind whether or not anyone ac-tively grows the cedars,4 70 Miller's cedar grove would teeter on theedge of the act requirement of nuisance. One could argue that Millerexposes himself to nuisance liability by growing cedar trees in largequantities, but this interpretation would stretch the act requirementfor policy reasons peculiar to one case.

The better course would be to treat the conflict as a case of purenecessity. In this rendition, the conflict between apple and cedargrowers would indeed be as stark as the city fire in American PrintWorks or the case of drowning sailors fighting over a ship-plank.47' Inthe real case, the apple growers should have enjoyed "property" intheir trees; in the hypothetical rendition, no apple grower could claim"property" in growing apples next to cedar groves, and no cedargrower could claim "property" in being free from apple growers' com-plaints. If the state did not intervene, the parties could and probablywould fight it out. Because neither side had "property," however, thestate could also settle this conflict by protecting whichever species oftree it chose. As in the real-life case, however, if the state forced cedarowners to cut down their own trees, it would need to compensate thecedar owners for doing apple growers' extermination work.

4. The Supreme Court's Embrace of Utilitarianism and Legal Realism

These issues are close, difficult, and perhaps obscure, but it iscritically important to get them right in order to maintain consistencyin the natural-right approach to takings. 472 By the end of the 1920s,the natural-right approach had little room for error. The dominantacademic trend found this approach incoherent. Any mistake by nat-ural-right-minded judges was bound to bolster that perception. Thesedangers surfaced when the U.S. Supreme Court upheld the VirginiaSupreme Court's decision. 473

The Court's opinion, written by Justice Harlan Fiske Stone, laterappointed Chief Justice by President Franklin Roosevelt, 4 74 wasstrongly sympathetic to utilitarian and Legal Realist ideas about prop-erty regulation. Justice Stone boldly broke with the nuisance-controlrationale:

[T] he state was under the necessity of making a choice between thepreservation of one class of property and that of the other whereverboth existed in dangerous proximity. It would have been none theless a choice if, instead of enacting the present statute, the state, by

470 See Miller v. State Entomologist, 135 S.E. 813, 818 (Va. 1926).471 See supra notes 198-206 and accompanying text.472 See EPSTEIN, TAKINGS, supra note 32, at 114.473 See Miller v. Schoene, 276 U.S. 272, 281 (1928).474 See SEIDMAN & TUSHNET, supra note 468, at 27.

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doing nothing, had permitted serious injury to the apple orchardswithin its borders to go on unchecked. When forced to such achoice the state does not exceed its constitutional powers by decid-ing upon the destruction of one class of property in order to saveanother which, in the judgment of the legislature, is of greater valueto the public. 475

Justice Stone turned the natural-right understanding on its head.He embraced a sweeping understanding of necessity. In the natural-right framework, American Print Works and the hypothetical renditionof Miller v. Schoene present two exceptional cases in which natural-rightprinciples cannot say which of two property uses has a right. JusticeStone made these exceptions the rule. In the natural-right approach,the state could play favorites between two uses of property only whenthere was property in neither. Justice Stone's gloss on Miller suggeststhat the state can play favorites whenever it wants. Thus, FrankMichelman uses Miller v. Schoene as he uses Hadacheck, to demonstratewhat he calls "the frequently illusory quality of the 'antinuisance'perception.

476

Second, Justice Stone endorsed the Legal Realist principle thatall law is political. He said that there "would have been none the less achoice if, instead of enacting the present statute, the state, by doingnothing, had permitted serious injury to the apple orchards within itsborders to go on unchecked. '47 7 This statement endorses the notionthat constitutional rights always depend on prior legislation or courtdecisions. As Cass Sunstein explains it, Miller v. Schoene encouraged achange of attitudes, in which "adherence to common law or status quobaselines no longer seemed neutral, and departures from those base-lines were no longer impermissibly partisan. Both the common lawand the statute amounted to legal choices. '478

From the perspective of natural-right-minded jurists, however,Justice Stone and the Realists begged the question. Founding Era ju-rists freely admitted that law was political. As Vermont jurist Nathan-iel Chipman explained, "In the United States of America, politicalopinions, though considered as merely theoretical, cannot be whollyinconsequential. In these States, government is, professedly, foundedin the rights of man."479 In Chipman's and other Founders' view, theprinciple of the equal rights of man set a political standard for judg-

475 Schoene, 276 U.S. at 279.476 Michelman, supra note 22, at 1198.

477 Schoene, 276 U.S. at 279.478 SUNSTEIN, supra note 462, at 54.

479 NATHANIEL CHIPMAN, SKETCHES OF TIHE PRINCIPLES OF GOVERNMENT 16 (1793) ("Theopinions entertained of government, of the necessity of laws, of the end to be attained bythem, and the means of attaining that end, will have an influence on the sentiments of thepeople, and the reasonings of the legislator.").

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ing property conflicts. In land-use law, for instance, the law needed toprotect residential uses of property from pollution and moral nui-sances. Otherwise, by doing nothing, the law would encourage pol-luters to steal equal-use rights from homeowners, just as the law tacitlyfavors defamers and harms libeled victims if it does nothing to restrainexcesses of speech. Thus, the Realists did not make any new discoverywhen they claimed that the law was political. Their argument sup-pressed the main question: whether the Realists had a property theoryto beat natural-right theory. 4s°

The Realists did have their own theory-the utilitarianism evi-denced in Mahon. Ultimately, Justice Stone's most important point inMiller v. Schoene was his claim that "the state does not exceed its consti-tutional powers by deciding upon the destruction of one class of prop-erty in order to save another which, in the judgment.of the legislature,is of greater value to the public."'48 1 Justice Stone believed that Millerand his neighbors acquired value in their land uses only to the extentthat the local community thought their uses had social value. If Millerand his neighbors disliked each others' land uses, their dispute oughtto be decided not by adjusting their rights, but by determiningwhether there was "a preponderant public concern in the preserva-tion of the one interest over the other."48 2 Nuisance and private-ne-cessity principles could not mediate such conflicts; every cedar-versus-apple problem presented a public-necessity issue. And the local legis-lature was best situated to determine what was publicly necessary; itknew best what the local community thought was required by sound"considerations of social policy. '4 3

5. Miller v. Schoene and the Redundancy of Regulatory Takingswith Legislation

Whatever the merits of this version of utilitarianism, it under-mines the distinctions that keep regulatory takings law conceptuallyseparate from the kinds of judgments that legislatures generally makein the legislative process. In cases of property conflict, Miller v. Schoenesuggests, "the State might properly make 'a choice between the pres-

480 If the Realists were off-target, it may have been because they were not shooting

directly at Founding Era natural-right theory, but at late nineteenth-century political the-ory known as "Legal Formalism" or "Classical Legal Thought." Classical Legal Thought didtry to establish a science of law independent from more political disciplines like law andsociology, and formalists tried to find "neutral principles" and general apolitical Americancustoms that might seal American law off from normative political theory. See ALSCHULER,supra note 362, at 86-94; MORTON J. HORWITZ, THE TRANSFORMATION OF AMERICAN LAW,1870-1960: THE CRISIS OF LEGAL ORTHODOXY 27-31 (1992); SEIDMAN & TUSHNET, supranote 468, at 31-33.

481 Schoene, 276 U.S. at 279.482 See id.483 Id. at 280; cf id. (deferring to the legislature's judgment if "not unreasonable").

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ervation of one class of property and that of the other,"' and favorwhichever "'is of greater value to the public.'" 48 4 Thus, every takingsquestion raises a question of public necessity, a choice between thesocial values of the two kinds of property at issue.

So understood, takings law collapses. It cannot serve as a mean-ingful constitutional check on regulation. Miller v. Schoene makes reg-ulatory takings law turn on the same considerations that motivate thepublic to regulate in the first place. Surely the Virginia legislaturepassed the cedar rust law because Virginia residents thought appleswere more important to state interests than cedar trees. Miller andother cedar owners might complain and bring takings claims, butsuch claims were bound to fail because they turned on ...whetherVirginia residents thought apples were more important to state inter-ests than cedar trees. Because the residents made their preferencesclear when the legislature voted, the constitutional claim ismeaningless.

IVPENN CENTRAL, AD Hoc INTEREST BAI.ANCING,

AND THE TAKINGS MUDDLE

It took another fifty years, but the Supreme Court fully endorsedMiller v. Schoene's approach in the landmark 1978 decision Penn Cen-tral Transportation Co. v. New York City. In Penn Central, the Court com-bined the most government-friendly features from the cases previouslyconsidered: Mahon's property theory, Euclid's deference, and Miller v.Schoene's legal realism. The turn to utilitarian takings principles wascomplete.

This Part re-examines Penn Central and subsequent decisions froma natural-right approach. Generally speaking, regulatory takings lawraises two main complaints. In the vast majority of cases, the law ismuddled, though the muddle never quite seems to stop the govern-ment from winning. In the remaining cases, the law is too rigid andtoo friendly to owners. The natural-right approach to takings has asimple diagnosis for both tendencies. From this perspective, the PennCentral regime distorts regulatory takings law because it does not at-tach enough importance to equal freedom of action over property.When a law restrains the equal and free use of property, it inflictsdemoralization costs on the rest of society. Such a law scares ownerswho are not directly affected, by threatening that they will be strippedof use rights like owners who are directly affected. These demoraliza-

484 Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 126 (1978) (quoting

Schoene, 276 U.S. at 279).

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tion costs should reduce the law's social value and require just com-pensation whenever they outweigh the law's social gains.

By and large, Penn Central interest balancing disregards thesecosts. This disregard makes Penn Central's interest balancing ad hocand government friendly. In a few extreme situations, as subsequentcases confirm, the interest balancing places too much weight on de-moralization costs. This excessive reliance makes the extreme casestoo rigid and owner friendly.

The natural-right approach also prescribes a cure as simple as thediagnosis. If one is truly interested in resolving Penn Central's doctri-nal problems, the simplest way to do so is to count free-use demorali-zation costs in takings interest balancing. From the standpoint ofnatural-right theory, when a court considers the social value of a prop-erty regulation, it should discount that social value by the extent towhich it threatens all owners' free use of property. Property regula-tions are likely to have low or negative social value when they fail bothof the tests applied in the nineteenth-century cases. When a propertyregulation neither directly abates a substantial threat to private prop-erty or to the public health, safety, morals, or commons, nor secures"common benefit" or an "average reciprocity of advantage" to all regu-lated owners, takings law should presume the law has little or negativesocial value. This approach restores the middle ground that has beenmissing ever since Penn Central. It anticipates the muddle and the ri-gidities, and it focuses takings law on the merits of the "regulation"under challenge. Because this approach is successful on its ownterms, it shows why and how takings law need not follow either of theextremes it follows now.

A. Penn Central: Completing the Utilitarian Turn

Penn Central established the basic framework for all subsequentfederal regulatory takings challenges. The Penn Central Transporta-tion Company owned Grand Central Station, a famous railroad termi-nal in New York City.48 5 The company sought to build a multistoryoffice building on top of the station, but the addition threatened tospoil Grand Central's value to the city as a famous landmark.4 6 Be-cause New York City's Landmark Commission had already declaredthe station a city historical site, the owners could not build the exten-sion unless the Commission gave them permission to do so.487 Whenthe Commission dismissed their request as "nothing more than an aes-thetic joke," the owners sued for just compensation. 488

485 Penn Central, 438 U.S. at 115.486 See id. at 115-16.487 See id.488 See id. at 117-19.

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Penn Central would have been an easy case for compensationunder nineteenth-century takings principles. Presumptively, PennCentral had private property in the right to use the airspace aboveGrand Central, and the Commission's action restrained the free exer-cise of those rights. Even though the company had not yet developedits airspace, the use potential in that airspace was private property, likeAlger's undeveloped potential in his shoreline flats or theJacobs fam-ily's potential in their home cigar business.489

Penn Central's use rights could not be excised from the company'sproperty on the ground that they were noxious. Because the Commis-sion's ruling cited only aesthetic concerns, it raised the same concernsas billboard laws. 490 Separately, it was probably impossible to find thatthe Commission's ruling, or the historic-preservation law generally, se-cured equal and mutual advantages to all property owners throughoutNew York City. Most residents enjoyed the scenery value of GrandCentral and similar buildings for free; affected owners lost use anddevelopment rights worth hundreds of thousands, or even millions, ofdollars. 49

1 In short, the preservation law would have "taken" the pri-vate property the company held in its use rights.

Instead of following this approach, however, the Supreme Courtused Penn Central to write a comprehensive opinion settling all of thequestions left open by the cases examined in the previous Part. In hisopinion for the Court, Justice Brennan grounded federal takings lawin utilitarian terms. He drew on Justices Holmes's and Brandeis'sopinions in Mahon,4 92 Justice Stone's opinion in Miller v. Schoene,49 3

and the scholarship of authors like Joseph Sax49 4 and FrankMichelman. 495 Federal regulatory takings law has followed Penn Cen-tral's conceptions of property and interest balancing ever since.

Penn Central recast what it means to hold "private property" in apossession. Like Justices Holmes and Brandeis in Mahon, Justice Bren-nan grounded "property" interests not in the freedom associated withproperty, but rather in the value associated with it. He suggested thatan owner has a threshold takings inquiry whenever a regulation has an

489 See supra notes 132-49, 250-72 and accompanying text.490 See discussion supra Part III.C.

491 See Penn Central, 438 U.S. at 116.492 See discussion supra Part III.D.

493 See discussion supra Part III.F.4.494 See Penn Central, 438 U.S. at 125 (citing Joseph L. Sax, Takings and the Police Power,

74 YALE L.J. 36 (1964)); see also Joseph L. Sax, Takings, supra note 223, at 150 (stating that"[o]nce property is seen as an interdependent network of competing uses .... propertyrights and the law of takings are open for modification" and noting that "a new view ofproperty rights suggests that current takings law stands as an obstacle to rational resourceallocation").

495 See Penn Central, 438 U.S. at 128 (citing Michelman, supra note 22, at 1226-34).

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adverse "economic impact" on her,496 and more particularly when theregulation interferes with "distinct investment-backed expecta-tions. ' '4 9 7 Like Justice Stone in Miller v. Schoene, Justice Brennan madethe owner's constitutional "property" in those expectations turn on abalancing of private and public interests. To determine whether a tak-ing has occurred, Penn Central instructs courts to balance the owner'seconomic harm and lost expectations against "the character of thegovernmental action. '498 On these standards, the Penn Central com-pany lost because it had no concrete expectations in developing itsairspace, while the New York preservation law had positive socialvalue.

499

Now, a takings regime does not assume a specific character sim-ply because it balances utilitarian interests. The regime's charactervaries depending on which social and individual interests count in thebalance, and on whether those interests count often enough to creategeneral rules or presumptions in the balancing. Theoretically, for in-stance, Justice Brennan could have followed Richard Epstein's Lock-ean conception of interest balancing. 500 Doctrinally, he could haveborrowed from the approach the Restatement of Torts uses to balanceutilities in nuisance law. Comment (e) to section 828 makes clear thatthis utility balancing includes in part the equal and free use of prop-erty, which the Restatement's comments recognize as "freedom of con-duct" and "the free play of individual initiative."5

11 Modern nuisancelaw, though not without its problems, sets coherent "regulatory" stan-dards because courts continue to recognize that "individual propertyrights," including especially a "landowner's right to use his propertylawfully to meet his legitimate needs," remain "important policy con-siderations. '" 50 2 Either approach would have generated principles ofintermediate scrutiny, nuisance control,. and equal advantage muchlike the cases considered in Part II. From the natural-right perspec-tive, of course, these approaches confuse the cart with the horse.They draw normative conclusions from utility before examiningwhether utility is consistent with human reason and morality. Still,Epstein's and the Restatement's approaches would generate resultssatisfactory to most natural-right-minded jurists.

But Justice Brennan chose a different approach, making federallaw agnostic about the character of the government's action. He in-

496 Penn Central, 438 U.S. at 124.497 See id.498 See id.499 See id. at 130-32.500 See discussion supra notes 368-69 and accompanying text.501 See RESTATEMENT (SECOND) OF TORTS § 828 cmt. e (1977); see also id. § 826 (using

utilitarian interest balancing to define the unreasonability element of nuisance law).502 Sher v. Leiderman, 226 Cal. Rptr. 698, 704 (Cal. Ct. App. 1986).

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structed that the character of the government action be deemed highwhenever the challenged law is "reasonably related to the promotionof the general welfare." 5 3 As a matter of law, this instruction is quitedeferential because it incorporates "rational-basis" principles of judi-cial deference. As a matter of policy, it applies the utilitarian propertytheory injustice Brandeis's Mahon dissent and Justice Stone's opinionin Miller v. Schoene. According to this theory, the greatest good for thegreatest number does not require the law to recognize social utility infreedom of action over private property. If this requirement is not acontrolling theoretical principle in property regulation, courts shouldnot impose it as a constitutional requirement on legislatures. Becauselegislatures balance social values before passing generally applicablelegislation, Justice Brennan's approach makes regulatory takings lawan empty check on legislation.

When Justice Brennan adopted this deferential understanding ofutilitarian interest balancing, he transformed regulatory takings lawinto the "muddle" it is widely accepted to be today. For Justice Bren-nan, regulatory takings law is inherently muddled. He complainedthat this branch of the law "ha[s] proved to be a problem of consider-able difficulty," and that the Court "has been unable to develop any'set formula' for determining" regulatory takings problems. 5

114 But

Justice Brennan had refashioned takings law consistent with a theorywithin which regulatory takings law would never be solvable. Ofcourse, the Court might have had substantive reasons for saying thatits utilitarian approach makes for better regulatory policy than thenineteenth-century approach, Epstein's approach, or modern nui-sance law. But that is a substantive choice, not a doctrinal probleminherent to takings law. Justice Brennan never confronted this issue,and neither has anyone else on the Court to date.5 11

5

B. Loretto: Regulatory Touchings

Penn Central leaves regulatory takings law with two strong impres-sions: there are no clear standards for sorting out whether govern-ment regulations are invasive, and it is almost always the governmentthat benefits from the lack of standards. These impressions are unset-ling, but it is one thing to doubt Penn Central's result or its rational-basis deference, quite another to frame a better approach. Anyonewho subscribes to Penn Central's basic intellectual foundations mustconfront the same problems that plagued justice Holmes in Mahon. If

503 Penn Central, 438 U.S. at 131.504 Id. at 123-24.505 For example, Hanoch Dagan developed a thoughtful rehabilitation of Penn Central

in Takings and Distributive justice, 85 VA. L. REv. 741, 795-99 (1999), but the Court has not

considered this critique. See infra Part ME.

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the free control and use of property does not produce enough utilityfor enough people enough of the time to weigh in takings interestbalancing, it is virtually impossible to define the exceptional circum-stances in which "regulation goes too far" and is "recognized as ataking. '506

To define those exceptional circumstances, jurists must draw onpolitical theory and property theory. They must generalize humanbehavior and then apply those generalizations to the third prong ofthe Penn Central balancing test, relating to the character of the govern-ment's action. Justice Holmes tested the other available options inMahon, and none of them worked. 5

117 If a jurist wants to follow stan-

dard utilitarian principles but leave an exception for "excessive" regu-lations, eventually she must formulate rules of utility specifying whenand why certain kinds of regulations have low social value or characterbecause they demoralize other owners.

Loretto v. Teleprompter Manhattan CATV Corp. provided one earlysign that the Court was struggling with this challenge. The casecarved out a per se exception to Penn Central balancing whenever thegovernment permanently and physically occupies some segment ofthe owner's property. New York State had passed a law requiring land-lords to allow cable companies to install cable television junctionboxes on their properties. 50 8 Under this law, the Teleprompter cablecompany installed a junction box on the roof of Loretto's apartmentbuilding to extend cable coverage to her tenants. 50 9 If the Court haddecided Loretto within the framework of Penn Central's balancing test,Loretto should have lost. The cable installation caused a tiny intru-sion on her property, it caused her little economic harm, and it cer-tainly did not lower her expectations of renting out apartments. Ifanything, the installation probably benefited her, by giving her cable-ready apartments to rent. Meanwhile, the cable-access law improvedstate residents' social welfare by increasing their access to cabletelevision.511o

Instead of following Penn Central, however, Justice Marshall distin-guished the case on -the ground that regulatory trespasses are special.When a regulation strips an owner of the right to prevent a trespass,Loretto holds, the character of the government action has a low valuein Penn Central's balancing test: "[W] e have long considered a physicalintrusion by government to be a property restriction of an unusually

506 See Pa. Coal Co. v. Mahon, 260 U.S. 393, 415 (1922); supra notes 372-76 and accom-

panying text.507 See supra notes 378-84 and accompanying text.508 See Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 421 (1982).

509 See id. at 422.510 See id. at 442-56 (Blackmun, J., dissenting).

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serious character for purposes of the Takings Clause." 511 On thispoint, the Court followed a recommendation made by Michelman ,512

who argued in Property, Utility, and Fairness that "[t]he psychologicalshock, the emotional protest, the symbolic threat to all property andsecurity, may be expected to reach their highest pitch when govern-ment is an unabashed invader. '5 13

This per se rule is not implausible, but one may still wonderwhether it provides the most sensible approach. First, Loretto's ratio-nale makes sense only if the law under challenge regulates land orchattels. It cannot apply to regulations of incorporeal species of prop-erty, which by definition leave the right to exclude out of the prover-bial bag of rights. As a result, Loretto's balancing of Penn Central'sinterests has little or nothing to say about takings in intellectual prop-erty, when today Congress is raising serious takings questions by pass-ing laws modifying the lengths of patent and copyright terms. 514 Norcan Loretto say anything insightful about takings principles as appliedto franchises, when states are raising serious takings questions by revis-ing franchise agreements drastically in a wave of deregulation. 51 5

Second, even as applied to land and chattels, Loretto seems incon-gruous next to Penn Central. From a financial standpoint, the stateinflicted a relatively cheap taking on Loretto while New York Citystripped Penn Central of development rights worth tens of millions ofdollars.5 16 From a theoretical standpoint, Penn Central and Lorettopaint a strange picture of human psychology. According to Penn Cen-tral, when a regulation strips use rights, people tend not to suffer anyloss of utility-even when they lose tens of millions of dollars. Butaccording to Loretto, when a regulation restrains the right to exclude,demoralization profiles spike off the charts. Not only is the affectedowner massively demoralized, many of her neighbors-who wouldhave been indifferent had she lost only use rights-now fear that they,too, may lose their exclusionary rights. Are human beings naturallythis schizophrenic, and is it reasonable to found a system of takingslaw on the assumption that they are?

By contrast, if one agrees with nineteenth-century jurists that therights to exclude and use are different manifestations of the same ac-

511 Id. at 426.512 See id. at 427 n.5 (quoting Michelman, suyra note 22, at 1184).

513 Michelman, supra note 22, at 1228.514 Eldred v. Ashcroft, 123 S. Ct. 769 (2003) (upholding the Copyright Term Exten-

sion Act).515 See William J. Baumol & Thomas W. Merrill, Deregulatory Takings, Breach of the Regu-

latory Contract, and the Telecommunications Act of 1996, 72 N.Y.U. L. Rev. 1037 (1997).516 See Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 116 (1978) (noting that

the lease for Grand Central Station's development rights was worth at least $2 million netannually for fifty years).

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quisitive and industrious passions, 517 the middle ground is obvious.Theoretically, different owners may value different uses or exclusion-ary rights differently, but as a starting presumption all owners valueboth. Doctrinally, it then follows that the "private property" elementof takings law should remain conceptually separate from the "regula-tion/takings" element. Thus, when a regulation invades or occupiesan owner's land, the trespass does not automatically trigger just-com-pensation requirements; it merely creates a threshold takings issue,just like any use restraint. In each case, the focus then shifts from therights lost to the government's justifications for excising those rightsfrom the owner's bundle. The same principles of intermediate scru-tiny, harm prevention, and reciprocity of advantage should then applyto invasive and noninvasive regulations alike. That is why, for in-stance, the fire-prevention law at issue in American Print Works "regu-lated," and did not per se "take," the right of building owners to stopoutsiders from tearing down their buildings. 518 Even though the lawstripped an owner of the right to exclude trespassers, the court wassatisfied that the law ordered the application of a background fire-prevention public-necessity exception inherent in every owner's rightto exclude. By contrast, the Woodruff court could state that the graz-ing law "took" grazing rights and exclusionary rights, because the lawneither prevented harm nor enlarged pasture owners' remainingrights.

5 19

Under this approach, the result in Loretto would remain the same,but the analysis would focus less on what Loretto lost and how she felt,and more on whether the government inflicted a disproportionateburden. The law would presume that Loretto lost private propertywhen she lost the right to exclude the cable company from her prem-ises. Contrary to the Supreme Court's opinion, however, that losswould not give Loretto an open-and-shut case for just compensation.A court would need to determine whether Loretto's lack of cable cre-ated some nuisance or necessity-based harm comparable to the cedarrust fungus in Miller v. Schoene.520 Because the building almost cer-tainly posed no such threat, the court would then need to ask whetherthe installation law worked to the equal advantage of Loretto, her te-nants, and other cable customers. Probably not, because the installa-tion of cable into apartments is not quite like the installation offootpaths, as in Palmyra or Paxson.521 True, Loretto would gain accessto cable for her own use and the use of her tenants, and a court would

517 See supra notes 69-72 and accompanying text.518 See supra notes 196-206 and accompanying text.519 See supra notes 216-22 and accompanying text.520 See discussion supra Part 1II.F.3.521 See supra notes 187-96 and accompanying text.

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need to discount her just compensation for these gains. 522 Neverthe-less, by any fair measure, Loretto lost more than she gained. Beforethe New York law took effect, cable companies usually compensatedowners at the rate of five percent of gross revenues from the cableservice attributable to the cable line on the owner's property.523 Be-cause the installation law neither prevented harm nor secured anequal advantage to all affected owners, it constituted a taking.

C. Lucas: Total Use Restrictions and the "Denominator"Problem

Reasonable minds may disagree over Loretto's per se rule, but ithas not been particularly difficult or controversial to apply. Localland-use planners now know there can be "no taking without a touch-ing." The Supreme Court fashioned a much more controversial andproblematic per se rule in Lucas v. South Carolina Coastal Council.524

Lucas holds that a noninvasive regulation automatically triggers com-pensation requirements if the regulation "denies all economicallybeneficial or productive use of land." 5

25 This holding strains regula-

tory takings law because it creates two radically different legal rules foruse restrictions.

Lucas presented a takings challenge to a total ban on coastal de-velopment. In 1986, Lucas paid $975,000 for two beachfront lots onthe Isle of Palms, intending to build single-family homes on them.526

In 1988, South Carolina enacted the Beachfront Management Act,which directed a coastal commission to establish an erosion line alongthe Isle and barred all new development within 20 feet of that line.52 7

Because Lucas's lots were seaward of the erosion line, he could notbuild on them. 528 The trial court found as a matter of fact that theAct deprived Lucas of any reasonable economic use of the propertyand rendered it valueless.5 29

522 On remand, the city cable-television commission used this principle to set Loretto's

compensation at one dollar, an award affirmed by the New York Court of Appeals. SeeLoretto v. Teleprompter Manhattan CATV Corp., 446 N.E.2d 428 (N.Y. 1983); DUKEMINIER

& KRIER, supra note 343, at 1178. The one-dollar award was far too low, see infra text accom-panying note 523, but the Court of Appeals was correct to discount Loretto'sjust-compen-sation award to some extent.

523 See Loretto, 458 U.S. at 423; see also Richard A. Epstein, Not Deference, but Doctrine: TheEminent Domain Clause, 1982 Sup. Cr. REv. 351, 379 ("[I]t was established that before thestatute the company had as a general practice paid royalties in the amount of five percentto landlords for the privilege of laying its cables.").

524 505 U.S. 1003 (1992).525 Id. at 1015.526 Id. at 1006-07.527 See id. at 1008-09 (citing S.C. CODE ANN. §§ 48-39-280(A)(2), -290(A) (Supp.

1988)).528 See id. at 1007-08.529 See id. at 1009.

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The parties, amici, and Supreme Court Justices illustrated justhow ambiguous Penn Central's conception of property and regulationcan be in practice. Justices Blackmun and Stevens argued there wasno taking.531 Their explanation accorded with the most straightfor-ward reading of Penn Central. As the Beachfront Management Actmade clear, beachfront conservation has a wide range of social values.Sound beaches act as storm barriers to adjacent properties, attracttourism, and protect indigenous flora and fauna. 53 ' Assuming, asJus-tices Stevens and Blackmun did, that there is no public utility in own-ers enjoying the free use of their property, the utility of public goodslike these could easily outweigh any private utility Lucas and otherowners might have in developing their lots. Justices Blackmun andStevens were emphatic that the balance tipped in the state's favoreven if Lucas and other affected owners lost all of the economic valuein their lots.5 3 2 Justices Blackmun and Stevens followed Penn Central'ssubstantive pro-government tilt to its logical conclusion.

Meanwhile, Lucas, his amici, and the Court's opinion demon-strated just how difficult it is to develop a principled rule predictingwhen owners should win within Penn Central's framework. BecausePenn Central's conception of the public's utility does not include anyprivate good comparable to the principle of equal freedom of action,the goods on the private scale are incommensurable with the goodson the public scale. It then becomes extremely difficult to explainwhy owners should ever win, even when one thinks an owner has beentreated unfairly in a particular case. Lucas tried to make the same badargument that Justice Holmes had tried in Mahon when he arguedthat the balance tipped heavily in favor of the Pennsylvania Coal Com-pany because it lost all the value of its mineral rights. 5 33 Lucas framedhis main legal challenge to the Beachfront Management Act as an all-or-nothing proposition: because the Act stripped his property of alleconomically viable use, he was automatically entitled to compensa-tion. As far as he was concerned, the merits of the Act made no differ-ence to his claim.534 An amicus brief filed on behalf of Lucas took aneven more extreme position. The American Farm Bureau's lead argu-ment boldly claimed that regulations triggered compensation require-ments whenever they diminished the value of property to any

530 See id. at 1036 (Blackmun, J., dissenting); id. at 1061 (Stevens, J., dissenting).

531 See Beachfront Management Act, 1988 S.C. Acts 634, quoted in Lucas v. S.C. Coastal

Council, 404 S.E.2d 895, 896-97 (S.C. 1991), rev'd, 505 U.S. at 1003.532 See Lucas, 505 U.S. at 1036 (Blackmun, J., dissenting); id. at 1064 (Stevens, J.,

dissenting).533 See supra notes 378-80 and accompanying text.534 See Petitioner's Brief on the Merits at 35-37, Lucas v. S.C. Coastal Council, 505 U.S.

1003 (1992) (No. 91-453).

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extent.53 5 But as extreme as this position was, it was not unreasonable,given that Penn Central provides no way to reconcile private and publicutilities in property.

Justice Scalia's opinion for the Court reflected these same ten-sions. The Justice was obviously bothered by the impact of the Act onLucas's property, but he had trouble articulating his dissatisfactionwithin the framework of Penn Central's doctrine and property theory.Thus, he framed the basic issue in Lucas in terms of a competitionbetween public and private values. 536 Justice Scalia agreed with JusticeHolmes that a regulation could go "too far" in diminishing the valueof property.537 Like Justice Holmes, however, he ran into troublewhen forced to explain why the government regulation went "too far."

To solve his dilemma, Justice Scalia made the daring move oftriple-counting Lucas's loss. He agreed with Lucas (and JusticeHolmes in Mahon) that the private interest weighed heavily because allviable uses of property were lost.53

18 But after counting the magnitude

of Lucas's loss once on Lucas's scale, Justice Scalia then counted ittwice on South Carolina's scale. First, when a regulation strips a prop-erty of all viable uses, Justice Scalia presumed, that fact rebuts PennCentral's general presumption that the character of the governmentregulation is high. Total restrictions "carry with them a heightenedrisk that private property is being pressed into some form of publicservice under the guise of mitigating serious public harm."539 Second,"total deprivation of beneficial use is, from the landowner's point ofview, the equivalent of a physical appropriation. ' 54

1 In other words,an owner's demoralization costs stay low when she loses a few uses ofher property, but when she loses all uses, they spike as high as theywould if the regulation sanctioned a trespass. Her neighbors then suf-fer the same sympathy demoralizations they would feel after watchinga neighbor suffer a regulatory trespass.

Justice Scalia's opinion largely rejected traditional nuisance prin-ciples. The Justice showed little patience or inclination to come togrips with the natural-right roots of those nuisance principles. In-deed, he soon complained that "the distinction between 'harm-preventing' and 'benefit-conferring' regulation is often in the eye of

535 See Brief of Amicus Curiae American Farm Bureau Federation and the South Caro-lina Farm Bureau Federation at 8-11, Lucas v. S.C. Coastal Council, 505 U.S. 1003 (1992)(No. 91-453).536 See, e.g., Lucas, 505 U.S. at 1018 ("'Government hardly could go on if to some ex-

tent values incident to property could not be diminished without paying for every suchchange in the general law,'" (quoting Pa. Coal Co. v. Mahon, 260 U.S. 393, 413 (1922)).537 Id. at 1014 (quoting Mahon, 260 U.S. at 415).518 See id. at 1017-18.539 Id. at 1018.540 Id. at 1017.

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the beholder. '54 1 It was inevitable, then, that he would conclude thatit "is difficult, if not impossible, to discern on an objective, value-freebasis" whether a given regulation exercises the police power or theeminent-domain power.54 2 Strangely, however, Justice Scalia thendrew on traditional nuisance-control principles to carve out an excep-tion to his per se exception to Penn Central. After Lucas, the state mustpay compensation to an owner who loses all economically viable usesof her property, but not if the regulation enforces a limitation onproperty rights inherent in background state property and nuisancelaw.5 43 He offered as an example the case in which a power companytries to build a nuclear plant on an earthquake fault.544 Justice Scaliadid not create this exception because he thinks it makes for good so-cial policy or protects individual rights. Instead, he merely presumesthat owners have no utilitarian expectations to put their properties touses that have always been proscribed by background law.5 45

Observers disagree whether Lucas deserved compensation for theeconomic loss he suffered, but virtually everyone agrees that Lucas'sreasoning is contorted. 546 Lucas's intellectual difficulties illustrate justhow hard it is to lay down a series of workable principles for distin-guishing between compensable and noncompensable regulationswithin the intellectual confines of Mahon and Penn Central. Penn Cen-tral is easy to apply as long as one does not mind if the governmentalways wins. It was obvious that Justice Scalia had reservations aboutthis tendency, but he was not familiar enough with relevant history orAmerican political theory to see what was good and bad in Mahon.Indeed, it is doubtful that Justice Scalia could have become familiarenough because in his own way he is as resistant to relying on natural-law or natural-right ideas as Justice Holmes. While he professes tosubscribe to natural-law theory personally, he thinks it has no place inthe judicial interpretation of constitutional text. He does not stop toconsider whether the natural law might inform the meanings of mor-ally-laden terms like "private property" or "taken. '54 7

These theoretical problems aside, Lucas and Penn Central also cre-ate a serious doctrinal tension. After these decisions, the most impor-tant factor in takings cases is whether the use restriction restrains all

541 Id. at 1024.542 See id. at 1026.543 See id. at 1029-30.544 See id. at 1029.545 See id. at 1030.546 See, e.g., Symposium, Lucas v. South Carolina Coastal Council, 45 STAN. L. REV. 1369

(1993).547 Compare Antonin Scalia, The Common Christian Good, Address at the Gregorian

University (May 2, 1996) at 11 ("I love the natural law.") with id. at 13 ("To say, 'Ah, but it iscontrary to the natural law' is simply to say that you set yourself above the democratic stateand presume to decide what is good and bad in place of the majority of the people.").

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or only some of the affected property owner's use rights. This distinc-tion invites owners and local governments to play strategic games.The owners' game is known as "conceptual severance. ' '5 48 Ownershave an incentive to turn "partial" regulations into "total" ones by "sev-ering" their parcels into affected and unaffected estates. When Penn-sylvania passes a law like the Kohler Act, for example, the coalcompany is in a better position to mount a takings claim if it ownsmineral rights and conveys away the surface rights. 549 Governments,on the other hand, have an incentive to play the "denominator"game.550 Rather than let a regulation "totally" wipe out the use of alot, the government can avoid Lucas's per se coverage by applying reg-ulations piecemeal.

The earliest state cases foresaw these problems with Lucas's "totalvalue" argument. In Coates, one of the early New York cemetery cases,the Trinity Church argued that even if its cemetery created a healthnuisance, it still deserved compensation because the anti-cemetery or-dinance "work[ed] a total destruction of the right, and fails in thecharacter of a mere regulation." 55' (Because the church's land grantspecified that the plot could be used only as a cemetery,552 the anti-cemetery ordinance rendered the plot even less useful to the churchthan Lucas's beachfront was to him.) The court brushed aside thisargument: "The absolute ownership must reside somewhere; and itshould not be in the power of the owner so to cut up and sub-dividethe uses of his property, as to evade the salutary application of policepowers."

553

Under the nineteenth-century approach, then, the proper way toresolve Lucas would be to inquire not how many rights in his fee sim-ple Lucas lost, but why South Carolina wanted to deprive him of them.On this approach, it makes no difference whether Lucas lost some orall of the development rights inherent on his beachfront property. Ineither case, the Act would trigger a threshold takings claim.

The important question would be whether the restrictions onbeachfront development were bona fide exercises of the police power.One provision of the Act, not challenged in the Lucas litigation,

548 See Margaret Jane Radin, The Liberal Conception of Property: Cross Currents in the juris-

prudence of Takings, 88 COLUM. L. REV. 1667, 1676 (1988).549 Compare Pa. Coal Co. v. Mahon, 260 U.S. 393, 414 (1922) (noting that "the extent

of the taking is great"), with Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470,493-502 (1987) (distinguishing Mahon, even though both cases reviewed challenges tocoal-support laws, on the ground that the use rights lost in DeBenedictis were a small per-centage of the total coal owned by the companies).

550 See Marc R. Lisker, Regulatory Takings and the Denominator Problem, 27 RUTCERS L.J.663 (1996).55 1 Coates v. City of New York, 7 Cow. 585, 605 (N.Y. Sup. Ct. 1827).552 Id. at 604-05.553 Id. at 605.

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barred owners from "armoring" their parcels by building erosion-con-trol walls along the shoreline. 554 That provision surely fell within thepolice power for the same reasons as the river-bank erosion law chal-lenged in Tewskbury555 or the boundary law challenged in Alger.556

Both protected the interest shared by the public and privatebeachowners to maintain the shoreline as a storm barrier. However,the section of the Act under challenge went further than the anti-armoring law; it barred all new construction between the shore anddesignated erosion setback lines.557 Following nineteenth-centurycases like Tewksbury and Stoughton, the state needed to prove thathome-building presented a real threat to neighbors' shorelines orhomes, or to the state's interests in the ocean, and that a total ban onhome-building was a reasonable and necessary response to thesethreats.

558

These questions were not addressed in Lucas, because Lucasmade his argument in all-or-nothing terms. In some cases, these ques-tions might force triers of fact to draw close lines. But in many others,it would be fairly easy to say that laws like the challenged section of theBeachfront Management Act are excessive. In any case, the nine-teenth-century approach does not create the discontinuities and per-verse incentives created by the Supreme Court's current approach.And, even with some gray areas, the lines drawn by the nineteenth-century approach are clear enough to suggest that Justice Scalia wasfundamentally wrong when he complained that it is "difficult, if notimpossible, to discern" the line between bona fide regulations andregulatory takings "on an objective, value-free basis." 559

D. Palazzolo: Complications with Expectations

Lucas points to another set of problems with the Penn Central ap-proach: "expectations" theory may not settle hard property and tak-ings questions. Penn Central, Lucas, and Loretto all groundconstitutional property rights in "investment-backed expectations. ' 56

11

There are serious theoretical limits to this approach. Expectationstheory seems attractive because, in Justice Scalia's words, it sounds"objective" and "value-free."'5 6

1 In reality, however, expectations-based

theory cannot settle hard cases without smuggling in normative as-

554 See S.C. CODE ANN. § 48-39-10, -250(5) (Law. Co-op. 1.987 & Cum. Supp. 2002).555 See supra note 243 and accompanying text.556 See supra notes 248-72 and accompanying text.557 See S.C. CODE ANN. § 48-39-10, -280(A) (Law. Co-op. 1987 & Cum. Supp. 2002).558 See discussion supra Part II.D-E.559 Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1026 (1992).560 See id. at 1015-19; Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419,

426 (1982); Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 124 (1978).561 Lucas, 505 U.S. at 1026.

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sumptions about when expectations are "reasonable" enough to de-serve legal protection.

Lucas hinted at this problem. On the surface, the Lucas categori-cal exception sounds objective and value-free: the owner wins justcompensation whenever a court makes the value-neutral determina-tion that she has lost all economically viable uses of her property.562

But on a closer reading, Justice Scalia was not prepared to go so far.He was not prepared to say, for instance, that a company could claimcompensation for losing the right to build a nuclear power plant overa fault line even if the plant was the only viable use of the land.563 Toavoid that consequence, Justice Scalia drew on nuisance law to limitthe reach of his total-diminution rule. But when Justice Scalia madethis limitation, he embraced the substantive commitments of nuisancecommon law and exposed himself to the Realist criticism that he waslegislating from the bench while pretending he was not.564 JusticeScalia fared no better under Justice Blackmun's criticisms on thisscore than the Formalists did against the Realists a century ago.56 5

Lucas is not unique. Expectations theory complicates what oughtto be simple and routine rulings in takings cases because it tries tomake important value determinations seem wholly value-neutral. Themost recent proof of this tendency came in the 2001 decision in Palaz-zolo v. Rhode Island.566 In the 1950s, Palazzolo organized a small corpo-ration to develop twenty acres of salt-water marsh flats in a smallRhode Island beach town.5 67 State agencies denied three applicationsfor development by the corporation in the 1960s.568 In 1971, theRhode Island Coastal Council promulgated regulations that desig-nated salt marshes like the company's as "coastal wetlands" and thusgreatly limited development. 569 In 1978, Palazzolo assumed owner-ship of the company's property when another state agency revokedthe company's corporate charter. 57 0 After the Council denied several

562 Even this determination is not entirely value-free. There are always bound to be

questions at the margins about whether an owner has any valuable use of a property. Forinstance, Lucas could have "used" his property by selling it off to a neighbor who couldhave used it to keep a pretty vista for her already-built home. One might answer "no,"because sale is not the same as use, but this answer makes a value judgment about whatconstitutes the "use" of property.

5663 See Lucas, 505 U.S. at 1029-30.564 See Seidman & Tushnet, supra note 468, at 32-33 (describing realists' claims that

politics of logic explained formalists' opposition to Progressive Era legal reforms).565 SeeLucas, 505 U.S. at 1054-55 (Blackmun,J., dissenting); seeSymposium, supra note

546.566 533 U.S. 606 (2001).567 Id. at 613-14.568 See id. at 614.

569 Id.

570 See id.

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other proposals to fill and develop the marshes, Palazzolo brought aninverse condemnation proceeding.571

Palazzolo percolated to the Supreme Court primarily to settlewhether and in what circumstances a subsequent owner may acquirethe takings claims of previous owners. If Palazzolo had an "expecta-tion" in using the property in the same manner that his developmentcompany had first intended to use it, the 1971 coastal-wetlands desig-nation upset his expectations, and he had a legitimate takings claim.But if he took title in 1978 as a brand new buyer, under Lucas the 1971designation would have become part of the background law of prop-erty limiting his expectations..5 72 From that perspective, he boughtnothing more than a lottery ticket on his company's takings claim,and there would be no reason to encourage such speculation.

If takings law cannot resolve this problem clearly and unequivo-cally, it will stymie title transfers and land sales routinely. The prob-lem, however, is deceptively difficult to answer within the premises ofexpectations theory. This is not a problem that any court could an-swer by looking to an "objective" and "value-free" fact; the law needs athoughtful, substantive definition of legitimate expectations and aclear rule. The Supreme Court certainly came up with no generalanswer. Five Justices were convinced that Rhode Island could not ar-gue that Palazzolo lost his claim simply by virtue of the fact that he"purchased or took title with notice of the limitation" imposed by thewetlands designation, 57 3 but they were not sure why. Without muchelaboration, Justice Kennedy's opinion for the Court stated that someprospective regulations are accepted "as reasonable by all concerned,"while others "are unreasonable and do not become less so throughpassage of time or title. '5 74 In concurring opinions, JusticesO'Connor and Scalia recharacterized the Court's opinion to matchtheir own views. Justice O'Connor thought that the transfer of titleought to be balanced as one of several factors relating to the owner'sreasonable expectations under the Penn Central inquiry; Justice Scaliathought the transfer of title made no difference at all in the Penn Cen-tral analysis. 575

The nineteenth-century approach would easily have avoided thisproblem. Doctrinally, it conceived of property in terms of rights, notexpectations or lost value. Theoretically, this approach would have

571 See id. at 614-15.572 See Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1027 (1992) (holding that a state

"may resist compensation only if the logically antecedent inquiry into the nature of theowner's estate shows that the proscribed use interests were not part of his title to beginwith").573 See Palazzolo, 533 U.S. at 626-27.574 See id. at 627.575 See id. at 632-35 (O'Connor, J., concurring); id. at 636-38 (Scalia, J., concurring).

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deemed it reasonable for an owner to expect to take title to propertywith the right to use it however he wished, consistent with the rights ofneighbors and the interests of the public. 576 This approach makeseasy work of the title-transfer problem, because it separates purchaseprice and expectations from the takings inquiry. The owners wouldpass on takings claims with the property just as owners pass on controlrights, use rights, encumbrances, adverse-possession problems, and allthe other rights and liabilities that go with property in the private law.The nineteenth-century approach would confirm that Justice Scalia'sposition was right: Palazzolo could claim an interest in challengingthe merits of the wetlands regulations on the very same terms as hispredecessor in interest. To be sure, Palazzolo would not win just com-pensation simply because he had a cause of action, but Rhode Islandwould have to defend the enforcement of its wetlands regulation onthe merits.

E. Tahoe-Sierra, or Conceptual Severance Run Amok

1. A Total Restriction for a Temporary Period

Palazzolo shows how expectations theory can confuse some of themost basic procedural points in regulatory takings law, but the mainsubstantive issue continues to be the tension between Penn Central'sbalancing test and Lucas's per se rule. This tension was resolved forthe most part in the 2002 decision Tahoe-Sierra Preservation Council, Inc.v. Tahoe Regional Planning Agency. 5 7 7 Tahoe-Sierra confirms Penn Cen-tral's status as the dominant case in regulatory takings law and rele-gates Lucas to the status of a narrow exception. 578 But the decisionalso shows how the Court's utilitarian property theory is distorting thesubstantive issues raised in federal takings law.

The regulations at issue in Tahoe-Sierra temporarily barred all de-velopment around Lake Tahoe to protect the lake's natural blue colorand clarity.5 79 Lake Tahoe attracts tourism, hiking, skiing, and alsoresidential development. 5 °1 As landowners have developed theirproperties within the basin created by the hills and mountains next tothe lake, the owners have stripped away the soil along the basin andreplaced it with asphalt and concrete. 581 Rain formerly absorbed by

basin soil now runs down the asphalt and concrete into the lake.58 2

Because that extra rain increases soil erosion, it funnels into the lake

576 See discussion supra Part II.577 122 S. Ct. 1465 (2002).578 See id. at 1485-87.

579 See id. at 1470-71.580 See id. at 1471.581 See id.

582 See id.

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nutrients that feed algae and spoil the lake's clarity. 583 California andNevada created a bi-state planning agency and instructed it to set air-,water-, and soil-quality standards to abate the pollution. 584 Theagency issued a series of land-use moratoria halting developmentaround the Tahoe basin while it determined how to execute itsmandate. 585

These moratoria tested the limits of Penn Central and Lucas be-cause they "totally" restricted development around Tahoe for a "tem-porary" period. They were "total" because they restricted alldevelopment around the lake while they were in effect.5 86 They were"temporary" because they lasted somewhere between thirty-twomonths and six years. The circuit court and a majority of the Su-preme Court held that the moratoria under review lasted thirty-twomonths; Chief Justice Rehnquist, writing for Justices Scalia andThomas, read the trial court's record to show that the moratoria atissue lasted more than six years.587 If Lucas controlled, the affectedowners suffered a "total" taking of all viable uses of leasehold interestsin their lands, and they would win compensation. If Penn Central con-trolled, the use rights the owners lost would have to be balancedagainst the reversionary rights they retained and the social benefits ofthe moratoria, and the owners would not win compensation. 588

2. Land-Use Moratoria Under the Natural-Right Approach

Under the natural-right approach, this total-temporary classifica-tion problem would be a sideshow. Instead, "private property" in landwould include the right to carve out a leasehold interest in the land,and also the right to use and develop the land during the lease. Be-cause the natural-right approach focuses on the rights lost, not on therights retained or the entirety of the estate, it avoids Tahoe-Sierra's clas-sification problems. The case would not turn on technical distinctionsbetween fees simple and leaseholds. The real issue would be substan-tive-whether the moratoria, in principle, regulated or invaded theTahoe basin owners' property rights.

This substantive issue would break down into two separate ques-tions. First, many moratoria laws, ex ante, redound to the equal andmutual advantage of all residents. As the Supreme Court noted, land-use moratoria and permit delays "are used widely among land-use

583 See id.

584 See id.

585 See id. at 1472-73.586 See id. at 1475 (citing Tahoe-Sierra Pres. Council v. Tahoe Reg'l Planning Agency,

34 F. Supp. 2d 1226, 1245 (D. Nev. 1999)).587 Compare id. at 1474 & n.8 (noting the moratoria lasted thirty-two months), with id.

at 1490-91 (Rehnquist, C.J., dissenting) (calculating the taking as lasting six years).588 See id. at 1475-76 (citing Tahoe-Sierra, 34 F. Supp. 2d at 1240-41, 1250-51).

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planners to preserve the status quo while formulating a more perma-nent development strategy. '58 9 As long as such restrictions apply only

for short time periods, no single set of owners can know in advancewhether the restrictions will protect or interfere with their land-usegoals. All owners will probably gain from forcing development-theirs or their neighbors'-to proceed through the zoning process.On the other hand, the longer a moratorium runs, the more substan-tive effect it has. Long-term moratoria can be used to the same effectas the zoning scheme in Euclid-to protect the interests of first-in-timeowners, slow-growth advocates, and preservationists, at the expense ofdevelopers, new-home buyers, and people who need apartments orother affordable housing.590

Natural-right theory cannot generate any hard-and-fast time limitto distinguish between these two extremes. It can, however, focus thetakings inquiry on the proper substantive questions. A two-plus-yearmoratorium likely did not secure an average reciprocity of advantageto all affected owners around Lake Tahoe. As Chief Justice Rehn-quist's dissent noted, the first moratorium issued by the Tahoe plan-ning agency lasted only ninety days, fairly typical for a temporarymoratorium. 591 Many other states limit the maximum length of mora-toria to anywhere from six months to two years, and California usuallylimits moratoria to approximately two years total.592 A strong substan-tive argument could be made that the moratoria ceased securing anaverage reciprocity of advantage after one year.5 93 Even assuming theTahoe planning agency's land-use practices were consistent with moststates' approaches, the moratoria were in force for more than twoyears, thereby exceeding the length allowable as a reciprocity-of-ad-vantage regulation.

The other possibility to consider is whether the moratoria werepart of a plan to regulate a nuisance against a public commons. LakeTahoe is a public water, and California and Nevada could probablyclaim a commons interest specifically in the lake's natural clarity. Thisargument tests the legal and policy limits behind background public-

589 See id. at 1487.590 See supra notes 429-34 and accompanying text.591 See Tahoe-Sierra, 122 S. Ct. at 1496 (Rehnquist, CJ., dissenting).

592 See CAL. GOV'T CODE § 65858(a) (West Supp. 2003); see also COLO. REV. STAT. § 30-

28-121 (2002) (six months); MINN. STAT. ANN. § 462.355(4) (West 2001) (two and a halfyears); NJ. STAT. ANN. § 40:55D-0(b) (West 1991) (six months); Tahoe-Sierra, 122 S. Ct. at1495-96 (discussing state-imposed maximum time limits on moratoria).593 This argument was raised in an amicus brief, and Justice Stevens's opinion for the

Court went to considerable trouble to refute it. See Tahoe-Sierra, 122 S. Ct. at 1484 & n.28(citing Brief of Amicus Curiae Institute for Justice at 30, Tahoe-Sierra Pres. Council v.Tahoe Reg'l Planning Agency, 122 S. Ct. 1465 (2002) (No. 99-1167)); id. at 1486-88 (refut-ing this proposal). Perhaps some of the swing votes on the Court considered this argu-ment seriously before joining Justice Stevens' opinion.

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commons and public-nuisance principles. The alleged "nuisance"does not occur because owners discharge any substance directly intothe lake; it occurs because owners reroute rain and soil erosion intothe lake after they pave their own properties. 59 4 This conduct mighttest the limits of the "act" and "invasion" ideas inherent in the idea ofa nuisance, like the cedar rust fungus in Miller v. Schoene.595 On theother hand, the owners around the lake are all in the same position,unlike the pasture, home, and apple-grove owners in Miller. It wouldnot be unreasonable for the law to presume that these owners shouldsubmit to nuisance liability for the pollution caused by runoff. As agroup, they stand to gain more than anyone else from maintainingLake Tahoe in its pristine state. Thus, it is fair to say that the morato-ria satisfy the "ends" element of intermediate scrutiny, because own-ers' development really threatens to harm the lake's clarity.

Even so, the moratoria would still fail intermediate scrutiny be-cause they were not reasonable and necessary means to the states'proper ends.596 The moratoria stopped owners who had not yet builtfrom making the lake dirtier, but they did nothing to abate the verysame pollution by owners who had already built up their properties.They singled out some owners at the expense of others, much like thelaw in Jacobs, which singled out small cigar shops in Brooklyn and NewYork tenements while leaving shops alone everywhere else. 597 Becauseany paving facilitates nutrient erosion into the lake, every owner ofdeveloped land around the Tahoe basin inflicts a new nuisance on thelake whenever it rains. The moratoria did nothing to stop such con-tinuing pollution. 598 To be sure, the planning agency would need tofind some other tool to reach the pollution caused by existing home-owners, because moratoria could not undo past erosion. Nonetheless,the planning agency could pursue some other regulatory approach,like a compensatory tax or a rule requiring better drainage. In natu-ral-right terms, the moratoria made some of the nuisance-makers bearall of the burden of cleaning up the nuisance.

As one can see, the natural-right approach confronts some con-ceptually difficult problems. But this approach does honestly assessthe merits of the land-use moratoria. At the end of the day, it focusesthe close questions on the merits and generates a clear answer to thequestion whether those moratoria are exercises of the police power orthe power of eminent domain. The same cannot be said about Lucas,Penn Central, or the different opinions in Tahoe-Sierra.

594 See supra notes 580-84 and accompanying text.595 See discussion supra Part III.F.596 See supra notes 236-42 and accompanying text.597 See supra notes 133-49 and accompanying text.598 See Richard A. Epstein, The Ebbs and lows in Takings Law: Reflections on the Lake

Tahoe Case, SH025 A.L.I.-A.B.A. 247, 253 (2002), available at WL SH025 ALI-ABA 247.

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3. Faux Formalism

The Court's opinion began by relying on several controversial

formalist arguments to disparage the plaintiffs' claims. Justice Stevensbegan his legal analysis for the Court by purporting to interpret theTakings Clause's text. While the Fifth Amendment's "plain lan-guage," Justice Stevens asserted, "requires the payment of compensa-tion whenever the government acquires private property for a publicpurpose,..... the Constitution contains no comparable reference toregulations that prohibit a property owner from making certain uses

of her private property.599

This plain-language interpretation begs too many questions to bepersuasive. It is not sufficient to focus, as Justice Stevens does, on thefact that the word "regulatory" appears nowhere in the TakingsClause. Individual-rights guarantees are not read so literally. Imagine

what regulators could do to freedom of speech if courts took their cuefrom the fact that the Free Speech Clause does not expressly extendto "regulations. ' 111 In the Takings Clause, the term "private property"may be read to refer to all of the traditional rights associated withproperty, like control, use, and disposition. If so, then the verb"taken" is easily supple enough to protect owners against the depriva-

tion of any of those rights, and it is also supple enough to incorporatesome showing of cause excusing or justifying the government for hav-ing restrained such rights. The same distinction between "invasion"and "regulation" runs through the Free Speech Clause, which barsCongress from enacting laws "abridging the freedom of speech;"6 1 11

the Contracts Clause, which bars states from enacting laws "impairing

the Obligation of Contracts; '6112 and the Second Amendment, whichprevents the right to bear arms from being "infringed.""""3

Indeed, the Second Amendment illustrates more clearly than any

other constitutional clause just how "regulation" complements andcontrasts with the "invasion" of a constitutional right. Although theAmendment guarantees that the right to bear arms may not be "in-fringed," it anticipates that the militia will be "well regulated, 1 1 4 spe-cifically by laws necessary and proper "[t]o provide for organizing,

arming, and disciplining, the Militia" under Article I, section 8.615

The term "infringe" thus both presupposes and implicitly excludes"regulations" that encourage the orderly and sensible exercise of the

599 Tahoe-Sierra Pres. Council v. Tahoe Reg'I Planning Agency, 122 S. Ct. 1465, 1478(2002).600 See U.S. CONSTr. amend. 1.601 d.602 U.S. CONsTr. art. 1, § 10, cl. 1.6(3 U.S. CONsTr. amend. II.604 I.605 U.S. CONST. art. I, § 8, cl. 16.

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right to bear arms.60 6 Whether or not one can say that the plainmeaning of the Constitution requires a judge to interpret the TakingsClause in similar fashion, it certainly permits and probably even in-vites such an interpretation.

Justice Stevens continued, the Court's opinion with an equallycontroversial originalist argument. He challenged Lucas and other re-cent cases by questioning the pedigree of the regulatory takings enter-prise. While the Court's 'jurisprudence involving condemnations andphysical takings is as old as the Republic," he argued, its "regulatorytakings jurisprudence . .. is of more recent vintage. ' '617 This state-ment is true but irrelevant, because federal courts had extremely fewopportunities to hear regulatory takings cases until the early twentiethcentury. 60 8 And if this statement were meant to be a claim about thehistory of "regulatory takings" law generally, as should be clear bynow, the statement would be flatly wrong. Regulatory takings princi-ples have a respectable pedigree in state court opinions going backearly into the nineteenth century. There may be substantive reasonsto reject those state courts' approach to regulatory takings cases, but itis not possible to dismiss their approach out of hand by suggestingthat Mahon was the first genuine regulatory takings decision.

4. All-or-Nothing Doctrinal Pressures

When Justice Stevens turned to substance, he discredited theplaintiffs' claims by framing the question as an all-or-nothing issue:The Court could not compensate the affected Tahoe owners underLucas without making local governments pay just compensation forevery moratorium-including "numerous normal delays in obtainingbuilding permits, changes in zoning ordinances, variances, and thelike. 6319 But Justice Stevens found himself forced upon this all-or-nothing choice only because Penn Central and Lucas make it virtuallyimpossible to make principled distinctions between garden-variety,short-term moratoria and the moratoria under challenge in Tahoe-Si-erra. Doctrinally, Penn Central cannot make such distinctions, becauseit holds that regulatory takings determinations are ad hoc and fact-specific. 610 Substantively, Penn Central compresses the difference be-tween long- and short-term moratoria by instructing courts to defer agreat deal to any claim that a government regulation has a good char-

606 For further elaboration on this analogy to the Second Amendment, see Barnett,

supra note 11, at 141.607 Tahoe-Sierra Pres. Council v. Tahoe Reg'l Planning Agency, 122 S. Ct. 1465, 1478

(2002).608 See discussion supra notes 276-82 and accompanying text.609 Tahoe-Sierra, 122 S. Ct. at 1485 (internal quotation marks omitted).610 See Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 124 (1978).

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acter.611 On the other hand, because Lucas held that distinguishingbetween "harm-preventing" and "benefit-conferring" regulations isonly "in the eye of the beholder,"612 Lucas's per se rule also restrictsthe ability to distinguish between long- and short-term regulations onthe merits.6 13

In short, if Justice Stevens faced an all-or-nothing choice in Tahoe-Sierra, that choice was forced upon him not by the facts but by theCourt's doctrine and property theory. The Court's law and policymade it easy forJustice Stevens to make it appear as if the Court couldonly remedy any injustice that might have been done to these ownersby creating serious and systematic problems throughout local land-uselaw.614 This appearance of inevitability also helped Justice Stevensmake it seem as if the Court had no choice but to confine Lucas to itsfacts. Justice Stevens thus announced that Lucas applies only when aland-use regulation strips an owner of all economically viable uses inan "unconditional and permanent" way. 6 15

The same conceptual problems came out even more clearly inthe Tahoe-Sierra dissents, by Chief Justice Rehnquist and JusticeThomas. It should be no surprise thatJustice Stevens emphasized theflexible and deferential features of Penn Central and the rigid and cate-gorical features of Lucas. He subscribes to Penn Central's substantivecommitments, and he dissented in Lucas. 1 6 In Tahoe-Sierra, he wasobviously interested in creating the appearance that there was noother realistic option besides construing Lucas as a narrow exceptionto Penn Central. Chief Justice Rehnquist and Justices Scalia andThomas, by contrast, were all quite interested in using Lucas's per serule to reorient takings law. But they could not formulate cogent sub-stantive responses to Justice Stevens's basic policy argument.

In their dissents, Chief Justice Rehnquist and Justice Thomas fo-cused more on the facts than they did on takings policy. Tahoe-Sierradid present them with a useful fact. Even by the majority's grudgingcalculation, the Tahoe-Sierra plaintiffs lost "temporary" developmentrights for thirty-two months. 617 A decade earlier in Lucas, by contrast,Lucas lost "permanent" development rights, but he lost them for a

611 See id. at 125.612 Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1024 (1992).613 See discussion supra Part IV.C.614 See, e.g., Tahoe-Sierra, 122 S. Ct. at 1485 ("A rule that required compensation for

every delay in the use of property would render routine government processes prohibi-tively expensive or encourage hasty decisionmaking.").

615 Id. at 1483 (quoting Lucas, 505 U.S. at 1012).616 See, e.g., Lucas, 505 U.S. at 1071 (Stevens, J., dissenting) (endorsing Penn Central);

Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470, 473-506 (1987) (opinionfor the Court by Justice Stevens applying Penn Central's approach to scale back the impactof Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922)).

617 See Tahoe-Sierra, 122 S. Ct. at 1474.

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shorter time period than the Tahoe-Sierra plaintiffs. The South Caro-lina Beachfront Management Act barred Lucas from any constructionon his beachfront in perpetuity,618 but the South Carolina legislatureamended the Act in 1990, only two years after its enactment, to allowowners to apply for special construction permits in designated coastalzones.6 19 As Chief Justice Rehnquist pointed out in dissent, to denythe petitioners coverage under Lucas's per se rule for total restrictionswould make "the takings question turn [ ] entirely on the initial labelgiven a regulation, a label that is often without much meaning. '" 620

Strictly at the level of the facts, the Chief Justice seemed right. Itseems unfair to say that the Tahoe-Sierra plaintiffs did not win compen-sation only because of the technicality that they lost all use rights in alesser land estate than a fee simple. Still, one clever contrast does notmake for a sound takings theory. To have any chance of expandingLucas, the dissenters had to develop their intuition about Lucas's andTahoe-Sierra's results into a robust theory explaining why regulatorytakings law makes a fundamental mistake when it emphasizes, as PennCentral does, that "' [t]aking' jurisprudence does not divide a singleparcel into discrete segments and attempt to determine whetherrights in a particular segment have been entirely abrogated. '6 21 Thedissenters had to confront and refute the serious practical objectionraised by Justice Stevens: If any moratorium inflicts a taking, land-useplanners will be forced "to rush through the planning process or toabandon [moratoria] altogether," and "landowners will have incen-tives to develop their property quickly before a comprehensive plancan be enacted."622

In other words, it takes a theory to beat a theory, and none of thedissenters had one. Chief Justice Rehnquist did not confront JusticeStevens on the merits; he only argued that the Court would not raisethe problems Justice Stevens was worrying about if Lucas's per se rulewere extended to long moratoria. Relying on Lucas's background-lawexception, the Chief Justice argued that all states carve out back-ground exceptions to property rights to make room for short-termmoratoria on development, lasting no more than two years. 623 Thiswas a technical and legalistic response to an important substantiveproblem. The Chief Justice never explained why these backgroundreservations on property rights made for sound policy. Nor did heexplain why, if land use conditions have changed drastically over the

618 See Lucas, 505 U.S. at 1008-09 (citing S.C. CODE ANN. § 48-39-290(A) (Supp.

1988)).619 See id. at 1010-11 (citing S.C. CODE ANN. § 48-39-290(D)(1) (Supp. 1991)).620 See Tahoe-Sierra, 122 S. Ct. at 1492 (Rehnquist, CJ., dissenting).621 Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 130 (1978).622 Tahoe-Sierra, 122 S. Ct. at 1488.623 See id. at 1494-96 (Rehnquist, C.J., dissenting).

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past century, local land use planners should not be free to try a differ-ent legal approach.

To make such substantive arguments, the Chief Justice wouldhave needed to recover the crucial feature that distinguishes the natu-ral-right-based approach to regulatory takings from the Penn Centraland Lucas approaches. Penn Central and Lucas place almost no weighton value judgments about a government regulation's substantivemerit; the natural-right approach places almost all the weight on suchjudgments.

Because the natural-right approach connects doctrine to substan-tive merits, it cuts through Justice Stevens's all-or-nothing arguments.

Justice Stevens worried that the Court could not compensate theplaintiffs in Tahoe-Sierra without forcing local governments to pay com-pensation whenever they cordon off crime scenes, close infested res-taurants, or bar access to fire-damaged buildings. 24 Not so. Underthe natural-right approach, the state can regulate a harm-preventionlimitation inherent in the free use of property as long as the regula-tion is consistent with the harm and the logical means for preventingit. Crime- and building-access orders usually follow this logic; themoratoria at issue in Tahoe-Sierra did so too selectively to deserve treat-ment as noncompensable "regulations." Separately, Justice Stevensworried that the Tahoe-Sierra plaintiffs could not win just compensa-tion without calling into question most permit delays and develop-ment moratoria.62 5 Again, not so. Under the natural-right approach,permit delays and development moratoria are justifiable as long as thestate can make a plausible showing that the restrictions caused bythese delays even out over the long run. Three- and six-month delayscan be justified on this basis, perhaps even twelve- and eighteen-month moratoria as well, but the delays in Tahoe-Sierra probably wentpast the breaking point.

Because the natural-right approach connects doctrine to sub-stance, it focuses the legal arguments on substantive issues. Con-versely, because Lucas purports to be value free, neither Chief JusticeRehnquist nor Justice Thomas managed to connect law to policy in acomprehensive way. This deficiency was especially striking becausethe substantive rejoinder to the Court's opinion was fairly simple. Noone needed to question California's and Nevada's power to clean upLake Tahoe, but it was fair to ask whether the states' planning agencyallocated the cleanup costs in a proportion roughly equal to the ex-tent to which owners were making the lake dirty. As soon as the plan-ning agency broke from this principle of equal and free use ofproperty, its cleanup scheme turned into a tool for exclusion. Judge

624 See id. at 1485.625 See id.

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Westenhaver anticipated all the problems eighty years ago in his opin-ion in Euclid.626 Because the moratoria lasted so long, they gave own-ers who had already built ski resorts, casinos, and posh homes apowerful regulatory lever with which to exclude new owners, newcompetition, new development, and new classes of residents and topreserve the enjoyment of Lake Tahoe for themselves.

CONCILUSION

In the first Lincoln-Douglas debate, Abraham Lincoln boldlyclaimed that "public sentiment is everything.116 2 7 "[H]e who mouldspublic sentiment," Lincoln explained, "goes deeper than he who en-acts statutes or pronounces decisions. He makes statutes and deci-sions possible or impossible to be executed." 628

Whether or not Lincoln was right as a general matter, Americanregulatory takings law certainly proves his point. For more than a cen-tury after the Founding, natural-right theory molded the sentimentsof the American state courtjudges who pronounced decisions in whatwe now know as regulatory takings cases. In the early twentieth cen-tury, natural-right property theory fell out of fashion in the law andacademy, and utilitarian property theory took its place. Because theU.S. Supreme Court did not start hearing regulatory takings cases un-til then, its earliest cases dramatize the tensions and differences be-tween these two competing approaches to property regulation. By the1970s, when the Court established Penn Central as the leading contem-porary regulatory takings case, utilitarian theory had been in ascen-dancy for so long that the nineteenth-century state cases might as wellhave been written in a foreign language. To paraphrase Lincoln, legalsentiment had been molded so thoroughly in utilitarian casts for solong that no one on the bench appreciated the spirit unifying nine-teenth-century regulatory takings law.

That loss of perspective has affected regulatory takings doctrineprofoundly. At least since Penn Central, regulatory takings law has hada desperate tone. The Supreme Court admits that its takings doc-trines operate without unifying standards or principles, but it doubtsthe law could do better under any other approach. The Court iswrong. The conceptual problems follow from the type of utilitarianproperty theory the Court applies, but the Court cannot see this con-nection because it has no way to step outside of the intellectual hori-zons shaping its law. Within the Court's horizons, Pennsylvania Coal

626 See discussion supra Part III.E.627 1 ABRAHAM LINCOLN, First Lincoln-Douglas Debate, Ottawa, Illinois, in ABRAHAM LIN-

COLN: SPEECHES AND WRITINGS, 1832-1858, at 495, 524-25 (Don E. Fehrenbacher ed.,1989).

628 Id. at 525.

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Co. v. Mahon is the foundational regulatory takings case. But withinMahon's horizons, Penn Central makes more sense. To appreciate thepossibilities and limitations of takings law, one must step out ofMahon's horizons and look at the development of the law from theoutside.

The nineteenth-century state cases provide that perspective. Thenatural-right theory they apply articulates principled reasons why thestate must compensate owners when it forces them to bear more ofthe burden for a new public project than their neighbors. That the-ory is supple enough to apply to many different sticks in the prover-bial bundle of rights-including use rights. Unlike Mahon's and PennCentral's expectations theory, the natural-right approach generates aseries of meaningful distinctions between "property" in use rights and"injurious uses of property." Unlike Mahon's and Penn Central's utilitybalancing, the natural-right approach generates two principled defini-tions of the "regulation" of property. One restores to affected citizensthe equal share of rights taken from them by injurious uses of prop-erty; once this body of law has done its job, the other forcibly rear-ranges legitimate uses of property to benefit the affected owners like agroup of equal partners. If a law discharges neither of these func-tions, it strips an owner of more use rights than he should have tocontribute for a public project, it "extracts a benefit" from the owner,and it inflicts a regulatory taking.

Not only does this approach highlight the doctrinal problems infederal law, it also suggests a simple solution. Ultimately, Mahon's andPenn Central's interest balancing breaks down because it balances ap-ples and oranges. One scale weighs individual interests unrelated toany wider social good; the other weighs a conception of social effi-ciency that takes little or no account of how much society depends onowners to exercise free initiative. Modify Penn Central's balancing testto take account of the utility society enjoys when owners get as muchfree action over their property as is consistent with the neighbors'needs, and this commensurability problem disappears. The law canthen develop the doctrinal standards it lacks now-intermediate scru-tiny, harm prevention, and equal advantage.

To be sure, coherent and principled doctrinal standards are notan end in themselves. This Article has not shown that the natural-right approach represents a better substantive theory of property reg-ulation than that of Penn Central. But the earlier approach does ex-pose and test many of the assumptions we hold about Penn Central andits legacy. Many of our assumptions about ad hoc principles are acrutch. They help us suppress whatever doubts we may harbor aboutthe merits of modern land-use laws. If we choose to keep Penn Central,we should have the integrity to accept that we are making takings law

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less clear than it could be, and the probity to admit that we keep thelaw the way it is now because we prefer the utilitarian theory PennCentral endorses and the substantive political results it delivers.

eric r. claeys, george mason university school of law · 2017-01-18 · introduction: natural-right...

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